French Election Scandal Pushes Yields to 3 Year High

A ‘radical-left winger’ and the fading hopes of the center-right are making investors nervous ahead of upcoming French elections sending 10-year French-German spreads to a three-year high.

The spread peaked out at 72 basis points at around 9 a.m. London time on Wednesday, a level not seen since January 2014.

“The more recent widening of this spread is clearly linked to anxieties over the French Presidential elections in April and the appointment of radical-left winger Benoit Hamon two days ago, together with the possible emerging scandal associated with Francois Fillon’s wife as paid-secretary, that together makes the establishment parties chances weaker and the presidential race much more open and uncertain that before,” Jan Randolph, director of sovereign risk at IHS Markit, told CNBC via email.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza