France: rumors swell on a downgrade by … – Les Echos

The rating agency will vote Friday on the rating of France. The government must be informed 24 hours in advance. He assured this morning that has not yet been informed

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Moody’s will she align Friday on its rival Standard & amp; Poor’s in downgrading the rating to Aa2 from France? For financial analysts, it is very likely. “ In general, Moody’s publishes its report after market, but they can theoretically do this before ,” says the team at RBS.

Regulation requires agencies to prevent the 24 government before the release of the report so that it can react. That’s why speculation is rife today. At Bercy, it denies the information of the newspaper L’Opinion which states that Moody’s warned of a deterioration.

Growth revised down

Why Moody’s, which has not prevailed since November 2012 could have elected lower the rating of France? In August, the agency gave three factors that could push for action: “ if our confidence in the implementation of reforms and their effectiveness is eroding. While prospects for growth in the medium and long term deteriorate further. Or if our expectations about the trajectory of the medium-term debt were close to 100% of GDP . ”

Since then, the government has conducted its operation-truth about the deficit (which does not reach 3% of GDP in 2015), and we know that government debt will come close to 100% of GDP in 2015 “ and Moody’s downgraded its growth outlook to 0.4% this year and 0.9% in 2015 ,” says the team at RBS.

Little impact

In any case, no one expects a degradation Note has an impact on the financial markets. “ The markets already consider that France is rated AA ,” says ING team. Especially the action of the European Central Bank against the threat of deflation in the euro area level – it cut rates to historic lows and starts to inject billions of liquidity – and the gloomy economic situation crush costs borrowing states. Recently, the French 10-year yields fell to 1.24%. Unheard of. On some maturities, France borrows even negative rates

VIDEO: Isabelle Couet, head of market analysis services – Les Echos <- sdvenc -> <- / sdvenc ->