French Bond Premium Risks Hitting Danger Zone, Candriam CIO Says

Candriam cuts French debt holdings, downgrades Europe equities
Sees yield premium widening to 100bps if it breaks above 80bps

Emmanuel Macron
Photographer: Ludovic Marin/AFP/Getty Images

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By Julien Ponthus

June 18, 2024 at 2:21 PM UTC

This article is for subscribers only.

The risk premium on French sovereign bonds is near to breaching a “dangerous” level that could signal a path to a financial crisis, warned Candriam’s chief investment officer.

French bonds have slid since President Emmanuel Macron called a snap election, driving their yield premium over haven German debt to 79 basis points on Tuesday, the most since 2017. A higher close would take it to the most since 2012, when the euro-zone sovereign debt crisis was in full swing.