FX.co ★ French Bond Yields Drop as Flash PMI Shows Economic Contraction

Yields on France’s 10-year government bonds decreased to approximately 3.55% in response to preliminary PMI data indicating a contraction in the nation’s economic activity for September. Specifically, the manufacturing PMI reached a seven-month low, while the services PMI declined to its lowest point in two months. Market attention is now directed towards an upcoming address by Federal Reserve Chair Jerome Powell, as well as Friday’s release of the US PCE price index, an important measure of inflation, as investors seek insight into future interest rate trends following last week’s interest rate reduction. Domestically, concerns about fiscal policy continue to impact the eurozone’s second-largest economy, with newly appointed Prime Minister Sébastien Lecornu focused on budgetary developments.