2024

Prime

Olympic

<p>After weeks of unbearable suspense, France finally has its new Prime Minister: Michel Barnier. To everyone’s surprise, this nomination not only impacted politics but also the stock market. The appointment of the former European Commissioner caused a surge in major French banks on the Paris Stock Exchange, giving a breath of hope to investors who were eagerly awaiting this outcome.</p>
<h2 id="h-bourse-les-banques-francaises-en-hausse">Stock Market: French banks on the rise</h2>
<p>Admittedly, France is currently experiencing a tough period with <a href="https://www.cointribune.com/en/france-is-not-alone-the-real-estate-crisis-is-also-hitting-china/" target="_blank" rel="noopener noreferrer nofollow">a real estate crisis like China’s</a>. But it seems that market speculations took an unexpected turn with the <strong>arrival of Michel Barnier at Matignon</strong>. Last Thursday, just after his name was announced, major French banks saw their stock prices <a href="https://investir.lesechos.fr/actu-des-valeurs/la-vie-des-actions/les-banques-francaises-montent-apres-la-nomination-de-michel-barnier-comme-premier-ministre-2117119" target="_blank" rel="noopener noreferrer nofollow">take off</a>.</p>
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<p><strong>Société Générale</strong> soared by <strong>3.9%</strong>, <strong>Crédit Agricole</strong> climbed by <strong>2.1%</strong>, and <strong>BNP Paribas</strong> was not left behind with <strong>a jump of 2.8%</strong>. That’s something.</p>
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<p>Meanwhile, the CAC 40 index, which was in the red, <a href="https://investir.lesechos.fr/marches-indices/les-points-bourse/la-bourse-de-paris-reduit-legerement-ses-pertes-a-la-nomination-de-michel-barnier-comme-premier-ministre-un-homme-de-consensus-a-matignon-2117104" target="_blank" rel="noopener noreferrer nofollow">reduced its losses to 0.31%</a>.</p>
<p>Why such enthusiasm? It’s simple, <strong>Michel Barnier is seen as a man of consensus</strong>, capable of navigating through a National Assembly without a majority. And the markets, they love stability.&nbsp;</p>
<p><strong>The choice of a reassuring man dissipated fears of chaotic management of the French economy, hence the market rebound.</strong></p>
<p>However, the real question remains: how long can this momentum last? Upcoming U.S. economic indicators might change the scenario.</p>
<h2 id="h-l-impact-de-la-nomination-sur-les-autres-marches">The impact of the nomination on other markets</h2>
<p>Apart from the stock market, the Barnier effect also shook up the <strong>foreign exchange market.</strong> <strong>The euro appreciated by 0.2% against the dollar</strong>, reaching a rate of 1.1103. However, in terms of bonds, things remained relatively stable, with <strong>the 10-year OAT yield at 2.932%</strong>.</p>
<p>As for the yield gap between French and German bonds, it remained unchanged at 70 basis points, a sort of reassuring balance for investors.</p>
<p>But this euphoria has its limits. <strong>International markets remain on guard</strong> ahead of the release of several crucial statistics on the U.S. economy. The much-anticipated ADP survey could be a game-changer. According to forecasts, <strong>144,000 jobs should be created in the private sector in August</strong>, but if this figure disappoints, French banks could come down from their pedestal.&nbsp;</p>
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<p>So beware of the boomerang effect of this improvement, which could turn into a mere flash in the pan.</p>
<p><strong>Markets influenced by Barnier’s nomination</strong>:</p>
<ul>
 <li>Paris Stock Exchange: +2% to +3.9% for banks;</li>
 <li>Foreign exchange market: euro at 1.1103 dollars;</li>
 <li>Bonds: stability at 2.932%.</li>
</ul>
<p>Even if French banks are breathing a bit easier with the nomination of Michel Barnier, the Paris 2024 Olympic Games might not have much to celebrate in terms of an economic boom. Between <a href="https://www.cointribune.com/en/economy-business-bankruptcies-are-skyrocketing-in-france/" target="_blank" rel="noopener noreferrer nofollow">business bankruptcies</a> and economic uncertainties, the future remains uncertain.</p>

Stock Market: French Banks Surge After Michel Barnier’s Appointment

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