Maybe not, but it’s borrowing cost is worst.
France’s 10-year yield rose to 3.02%, slightly higher than Greece’s 3.01%, as concerns grow that Barnier’s budget may not pass. In an interview on BFMTV, Barnier emphasized, “France is not Greece. France has far superior economic and demographic power, which means it is not Greece.” This statement reflects the government’s efforts to reassure investors amid rising tensions over fiscal policy. In light of some concessions to Marine Le Pen, including a promise not to increase electricity prices and a strategy to avoid a vote of no confidence for his one-month-old government, the CAC 40 climbed back 0.51% to close at 7,179 points.
In Asia, Tokyo reported an acceleration in inflation to 2.2%, which has strengthened the Yen to 151 against the dollar. This increase in inflation raises questions about the Bank of Japan’s (BoJ) monetary policy direction. In two weeks, both the Federal Reserve and the BoJ will hold meetings. The highest probability suggests a 25 basis point cut in the US, while Japan is expected to maintain its current stance; however, there remains a possibility that the Fed could hold steady while the BoJ opts for a rate hike in response to domestic pressures.
Meanwhile, in China and Hong Kong, markets retreated after a strong session on Wednesday, with the Hang Seng Index closing at 19,366 points. Investor sentiment has been influenced by ongoing concerns over China’s economic recovery and regulatory environment. Market participants are closely monitoring developments related to government policies aimed at stabilizing growth and boosting investor confidence.
Overall, as we approach key central bank meetings and navigate geopolitical uncertainties, market volatility is expected to persist, with investors remaining cautious about potential shifts in monetary policy and fiscal measures across major economies.