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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: The darkest moment in the euro zone! The market shorts the euro and bets on a historic collapse." Hope it will be helpful to you! The original content is as follows:
XM Foreign Exchange APP News-France political and economic crisis continues to escalate, not only reflecting the problem of domestic political fragmentation in France, but also likely to be aggravated by the French economy in financial difficulties due to the increasing financial difficulties of French economy. France is facing an increasingly severe political and fiscal crisis. Prime Minister Francois Bellu has implemented 51 billion yuan. As French Prime Minister Bellu faces a vote of confidence in parliament on September 8, political uncertainty continues to ferment. Analysts point out that France's political turmoil is becoming a new risk point that affects the euro's trend. The political crisis stems from France's worsening fiscal situation. The country's debt scale has reached 3.3 trillion euros, and the budget deficit accounts for 5.4% of GDP this year. If the 44 billion euro austerity plan proposed by Prime Minister Beiru, if failed to pass, France will become the main euro zone economy to change its government for the fourth time in a year and a half, a prospect that has worried investors. "The market is repricing French risks, with the 10-year French Treasury yield breaking through 3.2% recently, and the interest rate spread with Italian Treasury bonds narrowing to less than 50 basis points, indicating that investors' confidence in the euro zone's second largest economy is shaking," said UBS foreign exchange strategist. The euro's trend has responded significantly to this. Over the past week, the euro has fallen by 1.5% against the dollar and 0.8% against the pound. Options market data show that investors are increasing their short positions in the euro, and the risk reversal indicator has risen to a bearish 1.5 percentage points in the week. France's current dilemma is more systemic risky than Italy. After Italy's debt crisis reform in the 2010s, political stability has increased, and Prime Minister Meloni's government is expected to become one of the longest-term governments after the war. The French parliament has been in shattered since last year's electionIn the fragmented pattern, any fiscal reform faces fierce game between the left, the far right and the middle factions. Deutsche Bank macro analysts pointed out that "the French issue is more worrying because its economy accounts for more than 20% of the euro zone. If France's debt problems continue to deteriorate, it may trigger repricing of the entire euro zone bond market." Market participants are closely watching the ECB's reaction. Although central bank officials said they have not considered an emergency bond purchase plan, sources revealed that policymakers have mentioned France's risk exposure in internal discussions.
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