French government bonds still under pressure due to the political crisis and the concrete possibility that the Rassemblement National by Marine Le Pen win the July elections. The markets’ fear is that the next government will change expensive measures for public finances. The French 10-year yield (Oat) rises by 8 basis points to 3.20%. The yield differential with equivalent German securities exceeds 80 basis points, the widest ever. According to the latest estimates from the International Monetary Fund, the French deficit should remain stable at 4.9% of GDP both in 2024 and 2025. On Saturday the prime minister candidate for the far right of the Rassemblement National (RN), Jordan Bardella he stated that if elected he will abolish the reform of unemployment benefits which provides for a reduction in duration of the grant.
“The ECB is attentive to the correct functioning of the markets,” the president said today Christine Lagarde while visiting a company a Massy, France. “The tone will also be crucial adopted by the protagonists“, analysts underline after Le Pen declared over the weekend that she will avoid causing institutional chaos if she wins. “There is still great uncertainty given the lack of clarity on the economic policies of government economic policy“, comments another analyst. For now, the stocks of European countries with the least solid public finance indicators, Italy first and foremost, seem less affected by the sales than in recent days.s. The yield on 10-year BTPs rises by 2 basis points to 3.95%. Same increase for Spanish bonds, with a yield now at 3.2%. Greek ten-year bonds at 3.64% (+1).
