ABN AMRO: Limited risk of French bond market spreading more broadly to Europe

智通财经2026/10/07 12:35

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(1) Larissa de Barros Fritz, Senior Rates Strategist at ABN AMRO, believes that concerns about wider contagion in Europe sparked by the heavy sell-off of French government bonds are exaggerated. In a report released on Wednesday, she wrote that unlike previous periods of severe sovereign debt stress in the eurozone, there are currently no signs of broader financial risk transmission. (2) The credit default swap (CDS) spread, which measures the cost of protecting against default on French and German sovereign debt, has only "slightly" increased. This level is well below those seen during previous crises and also much lower than the CDS spread for Italy during the surge in concerns over Italy potentially leaving the eurozone in 2018. (3) Fritz believes that while French presidential candidate Marine Le Pen might have conflicts with the EU regarding France's contributions to the EU budget, she still states that the risks of fragmentation within the eurozone and of debts being redenominated into other currencies are relatively low. (4) She also wrote that the France-Germany bond yield spread is not expected to reach the levels above 200 basis points witnessed during previous periods of stress in the Italian debt market.

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(1) Larissa de Barros Fritz, Senior Rate Strategist at ABN AMRO, believes that concerns about broader contagion in Europe due to the sharp sell-off in French government bonds are exaggerated. In a report released on Wednesday, she wrote that, unlike previous periods of severe sovereign debt stress in the Eurozone, there are no signs of broader financial risk spreading.(2) The credit default swap (CDS) spread, which measures the cost of protecting French and German sovereign debt from default, has only risen “slightly,” remaining far below the levels seen during past crises and also well below the level reached by Italian CDS spreads when market worries over Italy’s potential exit from the Eurozone intensified in 2018.(3) Fritz noted that French presidential candidate Marine Le Pen may face conflicts with the EU over France’s contribution to the EU budget, but she still believes the risks of fragmentation within the Eurozone and of debt being redenominated in other currencies are low.(4) She wrote that the spread between French and German government bond yields is not expected to reach the more than 200 basis points seen during past periods of stress in Italian bond markets.

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The US Dollar Index, which measures the dollar against six major currencies, rose by 0.4% on the day, closing at 102.242 in the late New York forex market. By the close, 1 euro exchanged for 1.1199 US dollars, down from the previous session's 1.1261 US dollars; 1 British pound exchanged for 1.3219 US dollars, down from the previous session's 1.3277 US dollars. 1 US dollar exchanged for 157.96 Japanese yen, down from the previous session's 158.12 yen; 1 US dollar exchanged for 0.8330 Swiss francs, up from 0.8313 Swiss francs; 1 US dollar exchanged for 1.4256 Canadian dollars, up from 1.4209 Canadian dollars; and 1 US dollar exchanged for 9.9992 Swedish krona, up from 9.9861 Swedish krona in the previous session.

智通财经•2026/10/07 20:01

The US Dollar Index rose by 0.4%, closing at 102.242.

New York oil prices closed down 1.3%, Brent crude oil fell 0.38%.

At the close of trading, the November delivery light crude oil futures price on the New York Mercantile Exchange fell by $1.16, settling at $88.28 per barrel, a decrease of 1.3%. The December delivery Brent crude oil futures price in London fell by $0.38, closing at $100.20 per barrel, a decrease of 0.38%.

智通财经•2026/10/07 20:00