According to Reuters hedge funds are restoring bets that French bond prices will
fall, speculating the country's gamble on increasing public spending to boost
economic growth will fail.
Funds have already been burnt on the trade. Last year, the
European Central Bank's promise to buy government bonds to restore confidence
in the euro zone sent yields on French 10-year bonds tumbling by more than a
third. But that is not putting some off
from trying again. With President
Hollande's approval ratings at the lowest of any modern French leader and March
jobless claims at an all-time high, some funds think the country's bond yields
should trade closer to those of Italy
and Spain than Germany ....
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