Political, Inflationary Risks on Europe's Horizon: Market Snapshot

Watch on YouTube ↗  |  September 11, 2026 at 06:34  |  2:14  |  Bloomberg Markets
Speakers
Mark Dowding — Head of Developed Markets, GAM

Summary

The video discusses political and fiscal risks across Europe, with a focus on France as the main live risk and expectations that long-term European bond yields could rise further. The guest contrasts France with Italy and Spain, whose fiscal outlooks are viewed as decent, and also highlights Europe's cheaper borrowing, energy, and labor costs as advantages for AI buildouts and CapEx.

  • Central-bank rate decisions are seen as less important than bond market moves.
  • European elections and fiscal risks could push long-term bond yields higher.
  • France is flagged as the main live fiscal and political risk.
  • France's debt-to-GDP is cited at 117% and rising rapidly.
  • Italy and Spain are described as having decent fiscal outlooks.
  • Cheaper borrowing, energy, and labor costs are viewed as European competitive advantages.
  • AI buildouts and CapEx in Europe may benefit from lower costs.
Ideas
Mark Dowding Head of Developed Markets, GAM 0:17
European long-term bond yields to rise
The speaker argues that the key action is in bond markets rather than central-bank rate decisions, and that upcoming European elections and fiscal risks across EU member states mean long-term European bond yields still have further to rise and could cause trouble for the bond market.
European long-term government bonds HIGH
Mark Dowding Head of Developed Markets, GAM 0:32
France is Europe's live fiscal risk
France is the live fiscal and political risk in Europe: long-term yields have surged with steepening and term premium because a new budget must be agreed while debt-to-GDP is 117% and rising rapidly. Spreads have moved and France is the problem child; while there may be some value, it comes with noise and they are very concerned, so risk is likely to manifest there.
OAT HIGH
Mark Dowding Head of Developed Markets, GAM 1:40
Italy, Spain fiscal outlooks remain decent
Unlike France, Italy and Spain have strengthened their fiscal outlooks over recent years and, in some cases, over a longer period; their fiscal positions remain decent, supporting a relative preference for their government bonds.
BTP Spanish government bonds MED
Mark Dowding Head of Developed Markets, GAM 1:53
Europe cheaper costs aid AI capex
Europe's cheaper borrowing costs, energy costs, and labor costs give it a competitive advantage for investment into the new economy, including AI buildouts and CapEx; cheaper borrowing costs are the defining factor.
AI-SECTOR MED
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This Bloomberg Markets video, published September 11, 2026, features Mark Dowding discussing European long-term government bonds, OAT, BTP, Spanish government bonds, AI-SECTOR. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Mark Dowding  · Tickers: European long-term government bonds, OAT, BTP, Spanish government bonds, AI-SECTOR