What is the Geopolitical Risk Connection Between Left-Leaning Governments, Sovereign Spreads and Equity Markets?
Unsurprisingly, Michel Barnier’s government fell on the back of a non-confidence vote in the National Assembly, and President Macron has given himself a deadline of December 12th to find a new prime minister.
While French bonds have advanced as investors await the appointment of a new government and have adopted a wait-and-see outlook on the nation’s finances after Barnier’s regime collapsed, the potential for more gridlock may not be entirely negative as future legislative impasses should temper some of the left’s spending plans.
There is an observable connection between equity market returns and geopolitical risk.
Below are some links to some studies that have used our ICRG risk data to draw the connection.
(https://lnkd.in/gxz4rKH7)
(https://lnkd.in/dfhD6WQU)
(https://lnkd.in/e2am5Jad)
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