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.
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