German blue-chip stocks show more promise than their French counterparts, Barclays' strategists wrote in a note Friday, saying France has weak"long-term fiscal and growth fundamentals" and a looming risk of bond vigilantes sweeping in.
German blue-chip stocks show more promise than their French counterparts, Barclays' strategists wrote in a note Friday, saying France has weak"long-term fiscal and growth fundamentals" and a looming risk of bond vigilantes sweeping in.years of potential political uncertainty Doing so"would arguably be a relief given the high-risk premium embedded in French assets," the Barclays' strategists continued, potentially pushing the spread — the difference in yield between two bonds — between German and French government debt from around 84 basis points currently to their 70-to-75-basis-point range of the past few months. This would likely boost the CAC stock market index by between 2% and 3%, they said.
French risk premium had already risen in the run-up to its summer election, with the specter of an outright victory by the far-right or left sparking nerves over populist fiscal policy that could fail to address debt concerns.
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