Halister News

(Bloomberg) -- The link between the U.S. election result and next year’s vote in France shouldn’t be exaggerated, but BlueBay Asset Management is looking at the French presidential primaries with more interest, Mark Dowding, co-head of IG debt, writes.

• Moved to a short position in French bonds given the spread vs bunds remains very tight, Dowding says in e-mailed comments
  • If Sarkozy is elected as the right’s candidate, it’s plausible Le Pen could become the country’s president next year
• BlueBay is more wary of sovereign risks in the euro zone, paring sovereign spread duration, selling Portugal and reducing exposure in other issuers
• NOTE: French bonds may underperform peers on Le Pen risks: Nomura said last week