French-German spread has the scent of a trap
At the beginning of the quarter, even though the cash flow at the start of the month is usually a bit unusual, yesterday the euro was sold off significantly for the first time in a while.
The main reason is probably the France-Germany spread. In particular, recent movements have risen to an extraordinary level. Is France so notably worse that the spread has widened this much? Not exactly.
In simple terms of debt-to-GDP, France has a debt ratio of 120%, up from 115% last year. Italy has a debt ratio of 137, also expanding in recent years, and Germany has seen its debt ratio rise as it shifted from healthy management to defense spending.