A period of political uncertainty opened with a notice of cancellation The National Assembly continues to punish European markets.
Since the beginning of the week, the Euro Stoxx has lost 4%, the German Dax has lost almost 3% and, above all, the CAC 40 has lost more than 6%. On Friday afternoon, the Paris index fell by 2.4% to 7,520 points. If it ends the session at that level, it would end its worst week since March 2022. Between February 28 and March 4, 2022, the CAC 40 collapsed by 10%.
Bank stocks remain the main losers of sequence. Société Générale shares lost 16%, BNP Paribas 13%, and Crédit Agricole SA 12% during the week.
Tariffs are different
The decline, which erased almost all of the gains recorded by the Paris Stock Exchange since the start of the year, shows concern that forces are coming to power that could widen the government deficit and worsen the country’s growth prospects. In this context, the 10-year French sovereign bond yield jumped 20 basis points earlier in the week before easing, but the gap with the German yield (Bund) continues to widen. It has already arrived The highest since 2017 at 69 bp on Thursday the spread reached 76 bp around 1 p.m. on June 14, a level rarely seen since 2012.
In addition to the National Rally, which appears to be in a strong position ahead of the June 30 legislative elections, the new People’s Front, made up of most left-wing parties, including the most radical, has announced that it has achieved a certain goal. He agreed on Thursday evening, and according to the latest polls, Emmanuel Macron’s party is ahead in voting intentions. The latter is at its lowest level in opinion polls since the start of the yellow vest crisis in 2018-2019.