France Faces Fiscal Tests Amid Political Turmoil: Market Watch
French bond markets face uncertainty as President Macron navigates a political crisis. Despite this, the broader European market remains steady with borrowing costs unchanged. Analysts predict a possible downgrade in France's credit rating, while global fiscal policies influence yield spreads and investor sentiment.
Amid political turmoil in France, investors are closely watching the risk premium on French government bonds compared to the secure German Bunds, which saw a slight widening this week.
Despite the upheaval, the broader European bond market has remained stable, with borrowing costs across the Eurozone unchanged as they await President Emmanuel Macron's maneuvers in resolving the crisis.
Market analysts predict that France's credit rating may face a downgrade from Moody's or S&P soon, though no significant spread changes are expected without new elections. Macron's efforts in realigning political forces will be crucial for future market stability.
(With inputs from agencies.)
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