French Bond Yields Ease After Sharp Rise
France’s 10Y OAT yield edged down to 4.9% after rising 15 basis points on Monday, marking its largest one-day increase since mid-July, as social unrest and concerns over the government’s ability to rein in the budget deficit continued to weigh on sentiment. Authorities imposed curfews in several cities on Monday to contain nationwide anti-government protests, adding to pressure on President Emmanuel Macron and potentially complicating efforts to implement austerity measures ahead of the 2027 elections. The National Assembly is set to vote on the revenue section of the 2027 draft budget on Tuesday, though approval would not guarantee passage of the full bill. Prime Minister Sébastien Lecornu may still need to invoke Article 49.3 of the Constitution to push the budget through without a parliamentary vote by December 17. French government bonds have also come under pressure from a broader global bond selloff, driven by renewed inflation concerns and expectations of higher interest rates.
France’s 10Y OAT yield edged down to 4.9% after rising 15 basis points on Monday, marking its largest one-day increase since mid-July, as social unrest and concerns over the government’s ability to rein in the budget deficit continued to weigh on sentiment. Authorities imposed curfews in several cities on Monday to contain nationwide anti-government protests, adding to pressure on President Emmanuel Macron and potentially complicating efforts to implement austerity measures ahead of the 2027 elections. The National Assembly is set to vote on the revenue section of the 2027 draft budget on Tuesday, though approval would not guarantee passage of the full bill.
Prime Minister Sébastien Lecornu may still need to invoke Article 49.3 of the Constitution to push the budget through without a parliamentary vote by December 17. French government bonds have also come under pressure from a broader global bond selloff, driven by renewed inflation concerns and expectations of higher interest rates.