Shock on the financial markets after the resignation of Sébastien Lecornu. The announcement of his departure, less than twenty-four hours after the formation of his government, caused a surge of tension on French sovereign debt this Monday morning. France’s ten-year borrowing rate rose to 3.61% before falling slightly to 3.57% around 8:30 GMT. A brief but symbolic movement, since it represents an increase of seven basis points compared to the last close.
Fall of the CAC 40
“If the 3.60% threshold is crossed, French debt could be exposed to massive attacks, amplifying the nervousness of the markets”worried Antoine Andreani, director of research at XTB France, to AFP. At the same time, the gap with the German Bund – the famous “spread” – widened to 89 basis points, compared to 81 the day before. This is its highest level since January. “Lecornu’s resignation plunges the political scene into uncertainty. Investors fear a domino effect on economic and fiscal policy,” continues Antoine Andreani.
The CAC 40 index of the Paris Stock Exchange for its part suddenly fell by more than 2% this Monday around 10:00 a.m. (08:00 GMT) following the announcement of the Prime Minister’s resignation. The CAC 40 index, in cautious decline before the resignation of the Prime Minister, ended slightly higher on Friday, gaining 0.31%, or 24.91 points to settle at 8,081.54 points, less than a hundred points from its previous record dating from March. Among the most affected stocks were BNP Paribas (-6.00%) and Crédit Agricole (-5.56%). While the oppositions are calling for a dissolution and new elections, the markets could well experience further shocks in the days to come.
