FX.co ★ French 10-Year Yield Steady as Government Survives Confidence Votes

The yield on France's 10-year OAT has remained steady around 3.3%, maintaining proximity to a two-month low. This comes in the wake of Prime Minister Sébastien Lecornu's anticipated survival of two no-confidence votes in the National Assembly. These votes followed his decision to pause President Emmanuel Macron's pension reform, a move that provided temporary government stability but also increased the structural strain on France's already delicate public finances. Following Fitch's downgrade of France's credit rating to A+ in September, Moody's is scheduled to review the rating on October 24, with expectations of a shift in outlook from stable to negative. On the monetary policy front, the European Central Bank opted to keep interest rates unchanged, citing inflation nearing its target and upward revisions in growth forecasts. Meanwhile, with the US Federal Reserve grappling with labor market challenges, expectations are high for two forthcoming 25-basis-point rate reductions.