“The worst is yet to come” for French debt despite maintaining Moody’s rating, according to Pictet AM
Macroeconomics, monetary policy, market phenomena: every week, Le Figaro Patrimoine et Bourse offers insights from a financial professional.
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Macroeconomics, monetary policy, market phenomena: every week, Le Figaro Patrimoine et Bourse offers insights from a financial professional.
Last week, the financial rating agency Moody's maintained its rating for France. A surprising status quo for Christopher Dembik, investment strategy advisor at Pictet AM. A hypothesis emerges: “This decision gives credence to the rumor according to which the government has reached an agreement with the rating agencies to avoid a downgrade of the French rating, on condition of reducing the deficit below 5% of GDP in 2027”.
Impossible to know but, above all, does it change anything? Not really according to the strategist: “Everything suggests, given the political, budgetary and security impasse, that the 10-year OAT rate will move between 5 and 6% in the coming months, thus increasing the debt burden,” he explains.
However, each increase of 0.1 point costs around 3 billion euros in additional interest per year. And, “since the start of the year, rates have increased by 1.5 points, or fifteen times more! For…
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- Le Figaro29 Oct, 14:53
| Publisher Le Figaro (established tier) | +76 |
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