{Economic Daily News, 20th special report} Social unrest in France has hit the local financial markets, with the yield on France's 10-year government bond surging 14 basis points to 4.93 percent, the largest single-day increase in nearly a month; the spread over Germany's equivalent bond widened to 147 basis points, a two-week high. The euro also fell 0.25% against the U.S. dollar.
On Monday (19th), France's CAC 40 index closed down 1.1%, leading declines among major European markets. France's two major banks, BNP Paribas and Société Générale, fell 2.5% and 3.4% respectively. The retail sector was similarly hit, with Carrefour's share price dropping 2.2%. The CEO stated the company's losses due to vandalism would amount to tens of millions of euros.
At the heart of this turmoil is weakening market confidence in France's ability to effectively reduce its fiscal deficit. Hank Calenti, Global Market Strategist at Sumitomo Mitsui Banking Corporation, said: "This market volatility follows massive protests, indicating fading expectations for reforms."
Protests over rising cost of living have also erupted in other European countries including Spain and Italy, with local stock markets also falling. Calenti pointed out that the shockwaves are spreading across the entire eurozone, with reform prospects dimming in multiple markets. Notably, on Monday, Germany's 10-year government bond yield also rose 4 basis points to 3.45%, while the equivalent U.S. Treasury yield rose less than 1 basis point. (rc)
On Monday (19th), France's CAC 40 index closed down 1.1%, leading declines among major European markets. France's two major banks, BNP Paribas and Société Générale, fell 2.5% and 3.4% respectively. The retail sector was similarly hit, with Carrefour's share price dropping 2.2%. The CEO stated the company's losses due to vandalism would amount to tens of millions of euros.
At the heart of this turmoil is weakening market confidence in France's ability to effectively reduce its fiscal deficit. Hank Calenti, Global Market Strategist at Sumitomo Mitsui Banking Corporation, said: "This market volatility follows massive protests, indicating fading expectations for reforms."
Protests over rising cost of living have also erupted in other European countries including Spain and Italy, with local stock markets also falling. Calenti pointed out that the shockwaves are spreading across the entire eurozone, with reform prospects dimming in multiple markets. Notably, on Monday, Germany's 10-year government bond yield also rose 4 basis points to 3.45%, while the equivalent U.S. Treasury yield rose less than 1 basis point. (rc)
