Bob Lyddon’s Post

My comments included in this Daily Express article on the situation in France. Standard & Poors Ratings Services have issued a kind of pre-downgrade opinion telling France to get its house in order. How, exactly, with that election result? #imf #financialstability #fsb #financialstabilityboard #euro #eurozone #euros #bondmarket #europeanunion #europeanmarkets #europeancommission #brexitnews #brexit #bonds #ecb #eib #eif #EuropeanCentralBank #eba #Europeanbankingauthority #EuropeanInvestmentBank #EuropeanInvestmentFund #InvestEU #NextGenerationEU #esm #EuropeanStabilityMechanism #efsf #europeanfinancialstabilityfacilty #escb #eurosystem #target2 European Central Bank Eurostat European Banking Authority (EBA) European Investment Bank (EIB) European Investment Fund (EIF) ESM - European Stability Mechanism EFSF - European Financial Stability Facility European Union Financial Stability Board (FSB) European Commission Standard & Poors Ratings Services Moody's Ratings Fitch Ratings Morningstar DBRS https://lnkd.in/ewkUf23K

Being at the core of each country’s economic and financial infrastructure, banks remain macro-driven animals sensitive to any change in the perception of the current and future economic environment. And, following a severe market rout, French banks look to be right in the middle of the combat zone created by President Macron’s decision to dissolve the French lower house. After a surprise defeat in the European elections, President Macron decided to call for snap legislative elections, creating uncertainty regarding the country’s political, economic and fiscal path. The French stock market declined consecutively to the announcement of the National Assembly’s dissolution as a result of the political mayhem, led by the French banks which endured the deepest losses in the index, with SocGen losing 12%, BNP 8.5% and Crédit Agricole 7.5% in the two days following the announcement. The cumulative market cap decline of the three banks amounted to more than €10bn. This political event creates a multidimensional-uncertainty environment for French banks and explains well the knee-jerk market reaction as banks hate and suffer from political volatility and the macro-economic volatility which could erupt from it. Economic failures of the far-right agenda implementation would soon appear in this scenario, driving an economic downturn for the French economy under a combination of both supply shocks (private investments decline, capital crunch, increased taxation, decreased competitiveness) and demand shocks (inflation, high interest rates, spending cuts, increased taxation) as national revenue would dry up in the medium to long term, leading to spending cuts as a response to market pressure applied to French credit worthiness. One first explanation served under the scenario to explain the French banks’ stock rout would be the current and foreseen deterioration in French public finances, as outlined by the widening spead on French OATs. This sovereign risk, and its associated refinancing risk, always sticks to the banks’ shoes in times of doubt about public debt creditworthiness. This has been the case many times in Southern Europe, and France should be no exception to the rule. Invested to dive deeper? Read our latest publishing- French banks: navigating the political mayhem by contacting sales@alphavalue.eu #FrenchElections #banks

With parties on both ends of the French political spectrum* - the right-wing National Rally and the left-wing New Popular Front - campaigning on plans that would likely take fiscal deficits even higher, worries are growing about debt sustainability within the core of the common currency area. Fiscal discipline is beginning to make a rhetorical comeback. A number of governments have made reassuring noises, and the European Commission yesterday recommended launching the “Excessive Deficit Procedure” against France, Italy, Belgium, Slovakia and Malta in the euro area, along with Poland and Hungary outside it. But talk is cheap, and with nominal imbalances approaching the levels that preceded the euro crisis, stress is likely to continue building in the years ahead, with complex implications for currency markets. *In France, as in the US, the political "spectrum" might now be best described as a circle, with left- and right-wing parties essentially aligned in wanting bigger, more interventionist governments and more spending (they only differ on where governments should intervene, and what they should spend on).

📉 EUR/USD Under Pressure Amid Rising Political Uncertainty in Europe 📉 The EUR/USD suffered a significant blow as political uncertainty resurfaces on the continent. Macquarie predicts the euro will fall to $1.05 in H2 2024, driven by a rightward shift in European parliamentary elections and a surprise snap election in France. This echoes the instability seen during the Brexit referendum in 2016. Moreover, the strength of the U.S. dollar, bolstered by the Federal Reserve's hawkish stance, is expected to keep the euro under further pressure. 🔍 Key Factors: European political uncertainty Predicted euro drop to $1.05 Strong U.S. dollar due to Fed's policies Stay informed and prepared for potential market shifts! #Forex #EURUSD #Finance #Economics #MarketUpdate

Another Daily Express article featuring my commentary on the situation in France... #imf #financialstability #fsb #financialstabilityboard #euro #eurozone #euros #bondmarket #europeanunion #europeanmarkets #europeancommission #brexitnews #brexit #bonds #ecb #eib #eif #EuropeanCentralBank #eba #Europeanbankingauthority #EuropeanInvestmentBank #EuropeanInvestmentFund #InvestEU #NextGenerationEU #esm #EuropeanStabilityMechanism #efsf #europeanfinancialstabilityfacilty #escb #eurosystem European Central Bank Eurostat European Banking Authority (EBA) European Investment Bank (EIB) European Investment Fund (EIF) ESM - European Stability Mechanism Financial Stability Board (FSB) European Union EFSF - European Financial Stability Facility European Commission Standard & Poors Ratings Services Moody's Ratings Fitch Ratings Morningstar DBRS

The focus of the Eurozone bond market is currently on the yield spreads of French government bonds, known as OATs. #interestrates #financialmarkets #economy #economicoutlook #keplercheuvreux  #Wealthmanagement #France #Francegovernmentbonds #ECB

The #government has #increased #Moldova’s #subscription to the International Monetary Fund (IMF) from 172.5 million #Special #Drawing #Rights (SDRs) (approximately 232 million dollars) to 258.8 million SDRs, marking an increase of about 114 million dollars. This decision aims to #strengthen the country’s #financial #position within the IMF.

CE Watch: 20 years EU membership - Bond market integration The integration of the government bond markets of the CE/SEE NMS with the core markets in the EU is a milestone on the way to a more developed economy. While integration, as measured by price movements vis-à-vis the reference market, can be quickly reversed in times of crisis, the recent pandemic has shown that targeted policy measures can prevent renewed fragmentation. Within the Visegrád countries, the Czech Republic has a high degree of bond market integration, while high beta names such as Romania, but also Hungary, remain sensitive. On the other hand, as part of a quantity-based integration analysis, non-resident holdings have not changed too much since the euro area sovereign debt crisis due to the phenomenal home bias of investors. 📌 Read more in the latest report by Stephan Imre & Dorota Strauch, CFA: https://lnkd.in/egRFhurH

The International Monetary Fund (IMF) warns that political issues and pressure from interest groups could slow down reforms in Pakistan and threaten the country's fragile stability. Rising political tensions might make it hard to implement effective policies, even though the new government wants to pursue deeper reforms with IMF support. The report highlights that strong demands for easing policies could hurt the country's ability to manage its debt. With ongoing challenges like falling living standards and repeated economic cycles, the IMF stresses the urgent need for consistent and effective reforms to deal with tough external conditions and achieve lasting financial stability. #imf #economy

Well, there were no surprises, so there is a sense of relief in #Europe. Le Pen had a slightly smaller margin than some of the polls had pointed to, which may have helped the EURO a little bit higher on the open. 😎 The #euro touched a two-week high during Asian hours today, after the first round of France's shock snap election put the far-right in pole position, but offered little clarity on the final outcome, leaving #investors bracing for further volatility. 🙄 Marine Le Pen's National Rally (RN) party emerged ahead in the first round, confirming expectations, although #analysts noted her party won a smaller share of the vote than some polls had initially projected. #euro #eurozone #markets #investing #money #europe #france #future #economy #finance #politics #economics #news