Long term interest rates: something going on.

Here the evolution of the French Benchmark 10Y over the past 3 months.

Of course the volatility caused by the election of Donald Trump has to be factored. But with the prospect of accomodating fiscal policies on two sides of the Atlantic, with the limits of non conventional monetary policies - the size of central banks balance sheet cannot grow to the sky -, a scenario of repricing of sovereign debt is becoming more likely.

Are we at the tipping point? Difficult to say at this stage.

It would be a good news for the financial sector, less so for public finance that have benefited over past years of unprecedent levels of cost of funding. The progressive diffusion of normalised levels of interest rates to the whole inventory of sovereign debt will be very painful. Beware of the shock!