They retreated French bonds Following the announcement of Prime Minister Francois Bairou that he will call a vote of confidence.
The yield on the 10 -year French bond increased by nine base points to 3.51%, abboting losses in the global bond market. The country’s borrowing premium against Germany was widened by five basis points, closing at 75 basis points, the highest level since April and from 65 in late July. The moves accelerated by the end of Monday’s (25.8.25) meeting amid limited liquidity, with the United Kingdom being a holiday, according to Bloomberg.
Bairou said on Monday that French President Emmanuel Macron has agreed to convene parliament again in a premature meeting in order to allow the government to present its budget plan and hold the confidence proposal. Without a majority in Parliament, the prime minister is in danger of resigning in the autumn by vote of confidence – the same fate his predecessor, Michel Barnier, had in December.
French bonds have the worst performance in the region since last year’s surprise elections, which have led to a deadlock in Parliament, derailing support for budgetary reforms. The yields of the country’s 10 -year bonds are now one of the highest in the eurozone, having already overcome countries that were once in the heart of the European debt crisis, such as Greece and Portugal. Monday’s moves left about eight base points below Italian.