In spite of S&P, the auction of French government bonds recorded a good demand and declining yields in the first issue after the triple A cut by Sarkozy (triple A instead confirmed by Moody's). The Elysée managed to place 8,5 billion bonds on a range of offers between 7,4 and 8,7 billion. The 4,5 billion three-month bonds pay 0,165% compared to the previous 0,167%, the 2,2 billion 6-month bonds 0,281% from 0,286% and the 1,85 billion 12-month bonds 0,406% from 0,454 % of last January 9.
So it was repeated same reaction as US T-bonds after the S&P cut: Instead of rising, as logic would assume, yields on 29-year US bonds have fallen and buying has increased. And in France, the decline in yields occurred in an even more complex context, in the absence of a central bank like the Fed which acts as a lender of last resort. On January XNUMX Nicolas Sarkozy, who would push for a postponement of the three-way summit with Merkel and Monti, he will explain to the French his recipes for getting out of the economic crisis by speaking on live TV: after the loss of the triple A there are many criticisms that have rained down on the Elysée at home where there are less than a hundred days left before the presidential vote.
He reacted well too spread on 126-year securities which drops to 40 basis points and the stock market returns to positive: the Cac 0,45 index rises by XNUMX%. On the other hand, albeit weak and in negative territory, today the stock exchanges withstood the tsunami of S&P confirming JPMorgan's thesis according to which, on the basis of the precedents, in 9 out of 10 cases, the decision of S&P's, already incorporated by the markets, does not translate into a bear market, but in a modest rebound. The Ftse Mib also rose by 0,5%, the Dax by 0,86% and the Ftse 100 by 0,27%. The spread between the BTP and the Bund remains below 500, down to 483 points, just as the Spanish Bonos travel down to 341 points. However, the situation regarding European debt is still highly tense: today the spread of Portuguese ten-year bonds reached a record 1.213 basis points. While in Greece we are preparing for a new round of negotiations with private creditors in a crucial week to avoid default.
