Possible scenario
Moody’s Downgrades France
40% Chance
Moody’s is most likely to respond to the 5% French yield level, the failed finance committee vote, and the sharp OAT-Bund spread widening with a downgrade. The market reaction depends on whether the agency frames the move as a one-off adjustment or signals further cuts.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -2.7%
- Utilities -1.7%
- Industrials
Portfolio impact
S&P 500-2.0%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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