French government bonds fall with collapse of confidence and vote on budget law

With French consumer confidence falling to a 13-year low, sales on transalpine government bonds intensify and the yield on the ten-year OAT rises by 4.6 basis points, reaching 4.94%, widening the spread with the German Bund to 160.4 points, up by 7 points. The debate on the 2027 budget kicks off in Paris today in Parliament, with the first votes expected on some points of the text.

It remains to be seen whether the government led by Prime Minister Lecornu will be able to proceed with the ordinary process or will resort to the article which allows the adoption of the Budget law unless a motion of no confidence is approved by the National Assembly.