French sovereign yields spike amid Lecornu resignation
|Flash inflation for September printed at 2.2% in the overall index and 2.3% for the core subindex; the latter number has been stable now for the past five months.
With these numbers and the business activity PMIs consistent with steady but slow expansion, the ECB can afford to sit on 2% rates for the foreseeable future, in our view.
Markets are in broad agreement, with swaps now not pricing in any further cuts for as far as the eye can see.
Meanwhile, the political soap opera in France has delivered yet another absurd sub plot, after Prime Minister Sebastien Lecornu resigned on Monday, a day after President Macron named his new government.
French sovereign yields have spiked this morning, as markets place a fresh risk premium on the country’s assets.
In the absence of significant economic releases or policy news in the common bloc this week, this will probably be the main domestic development for the euro in the coming days.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.