Societe Generale: Eurozone bond investors turn their focus to public finances

On October 25th, Jinshi data reported that strategists at French bank BNP Paribas stated that European government bond investors have shifted their focus to public finances. They said, “Moody’s and Fitch have sounded the alarm for European public finances by giving negative outlooks for Belgium and France.” They said that the shift in focus has pushed Italian and Spanish bonds to outperform German bonds recently. This is in stark contrast to French bonds. Strategists believe that Moody’s and S&P may take further negative rating actions against France and Belgium in the near future. S&P will update its credit rating for Belgium later on Friday, while Moody’s will review France’s sovereign credit rating on the same day (currently, Moody’s rating for France is AA2, equivalent to S&P and Fitch’s AA rating). S&P will update its sovereign rating for France on November 29th.