Premium to Hold French Bond Rises as Le Pen Narrows Gap

February 21, 2017 Share Print 0

The premium investors demand to hold French bonds instead of German debt rose to its highest since late 2012 on Monday after a poll showed the far-right Marine Le Pen narrowing the gap with centrist opponents in the race for the French presidency.

Renewed selling in French bonds rippled through euro zone bond markets, helping to push yields on short-dated, safe-haven German bonds to a record low, although the impact faded as the day wore on.

A poll released on Monday showed Le Pen 16 points behind centrist Emmanuel Macron, down from 20 points previously for a potential second-round run off scheduled for May. Le Pen was 12 points behind conservative candidate Francois Fillon, from 14 points previously.

Le Pen is expected to win in the first round, in April, and investors are concerned about her anti-euro stance, among other factors.

via CNBC

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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.