09.09.202507:42:38UTC+00French Bond Yields Edge Higher as Political Turmoil Deepens

The yield on France’s 10-year government bonds inched closer to 3.5%, recovering from a recent three-week low of 3.398% observed on September 8. This movement comes in the wake of a confidence vote that resulted in the ousting of Prime Minister François Bayrou. The outcome, which was largely anticipated, led to the collapse of his minority government, amplifying the ongoing political turmoil in France. Bayrou had initiated the vote in a final bid to secure parliamentary backing for austerity measures targeted at reducing public debt. Now, President Emmanuel Macron is tasked with appointing his third prime minister within a year. Concurrently, the focus shifts to Thursday’s European Central Bank meeting, where policymakers are expected to maintain steady interest rates for the second consecutive time, given that inflation is aligned with targets. In the United States, attention turns to the impending inflation report this week. Last week's disappointing labor market data bolstered expectations for a potential Federal Reserve rate cut in September.