French Bonds Show Le Pen Risk, Not Expectation: Reality Check
- Nation’s 10-year yields remain low by historical standards
- BlueBay sees yield premium matches 20% chance of Le Pen win
AB's Loughney Sees French Markets Focused on Uncertainty
This article is for subscribers only.
The French bond market may be wary of a Marine Le Pen victory, but it is far from fully priced in.
The yield on French 10-year bonds has almost doubled in 2017 amid concerns the anti-euro candidate could spring another political shock in this years elections. The underperformance, which started in earnest after the election of Donald Trump, has accelerated following revelations about Republican Francois Fillon’s employment of his wife. Still, even as markets price in a larger political premium, French bond investors are showing few signs of a full panic.