Larissa de Barros Fritz, a senior interest rate strategist at ABN AMRO, believes that concerns that a sharp sell-off in French treasury bonds could cause more widespread contagion in Europe have been exaggerated. In her report on Wednesday, she wrote, “Unlike previous periods of severe pressure on sovereign debt in the Eurozone, we have seen no sign of wider financial risk spreading.” Credit default swap spreads, which measure the cost of protecting French and German sovereign debt defaults, rose only “slightly,” far below the level of previous crisis periods. This spread is also far below the level of Italy's CDS spread in 2018 when market concerns about Italy's exit from the Eurozone heated up. Although Fritz believes that French presidential candidate Marina Le Pen may be in conflict with the EU due to France's funding of the EU budget, she also stated, “We still think the risk of fragmentation in the Eurozone and the conversion of debt to other currencies is low.” She wrote, “We don't expect interest spreads on French and German bonds to reach the level of more than 200 basis points seen during the previous period of pressure on the Italian bond market.”

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.