FRANCE: Bayrou Approval On The Rise, But 3rd Censure Vote Looms (1/2)
The latest opinion polling from Ifop shows public approval of PM Francois Bayrou increasing in February amid censure votes in the National Assembly following his decision to force the 2025 budget through without a vote. The poll carried out 5-6 Feb on 1,500 respondents showed a 39% overall approval rate compared to 61% disapproval. This compares to a 35-65% split in January.
- Bayrou's strongest approval, unsurprisingly, comes from supporters of the pro-Macron centrist Rennaisance, with 83% backing the PM. The greatest increases in support, though, came on the right. Supporters of the pro-gov't conservative Les Republicains gave Bayrou an approval rating of 58%, up 11% in a month and even support among backers of the far-right Rassemblement National (National Rally, RN) increased 12% to 31% overall.
- The unsuccessful censure motions are unlikely to damage either the RN or centre-left Socialist Party (PS), whose deputies did not vote to remove Bayrou earlier this week. Ifop: "a majority of French people believe that the Socialist Party (61%) and the National Rally (62%) were right not to censure the government. Supporters of both parties overwhelmingly support this choice: 76% of Socialist supporters and 75% of RN supporters approve of their party's decision."
- For his part, the poll shows President Emmanuel Macron's disapproval rating hitting a joint-high of 76%, last recorded in Dec 2018 at the height of the gilets jaunes protests. Macron will take part in a televised interview on the eve of the AI Action Summit on 9 Feb at 2000CET.
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CANADA: Fin Min LeBlanc Says He Won't Run For LPC Leader
Finance Minister Dominic LeBlanc has confirmed that he will not enter the race to succeed Prime Minister Justin Trudeau as leader of the centre-left Liberal Party of Canada (LPC). In a statement, LeBlanc - who took over from long-standing Finance Minister Chrystia Freeland following her resignation in December 2024 - said that his focus and that of his gov't departments must be on the threatened imposition of tariffs from the US once President-elect Donald Trump comes to office.
- The two frontrunners to take over from Trudeau remain Freeland and former BoC and BoE governor Mark Carney. Betting markets are somewhat divided.
- Polymarket has Carney as the favourite to become the LPC leader with a 40% implied probability to Freeland's 35%.
- Data from Kalshi shows bettors giving Freeland a 43% implied probability of being the next PM compared to 38% for Carney (the two websites ask slightly different questions, but the next LPC leader - barring unforeseen circumstances - will become the PM and as such can be seen as essentially the same).
- Whether Carney, Freeland, or another potential candidate emerges as LPC leader and PM they are unlikely to have a significant amount of time before an election campaign.
- The leftist New Democratic Party and the regionalist Bloc Quebecois, both crucial to avoiding defeat for the minority LPC gov't in previous confidence votes, have said they support an election at the nearest opportunity. Opinion polling continues to show the main opposition centre-right Conservatives on course for a comfortable majority.
STIR: ECB Pricing Back To Little Changed On the Day As Bonds Recover
ECB-dated OIS back to little changed on the day, with the Dec ’25 contract showing ~102.5bp of cuts.
- Dec meeting pricing briefly moved to ~99bp of cuts at one stage today, during the broader sell off in wider core global FI markets.
- Bonds have since recovered from session lows, which has fed into the stabilisation in STIRs.
- Euribor futures last +1.0 to -5.0.
- November lows in ERZ5 & Z6 still some distance below.
- Hawkish media speculation surrounding Trump’s tariff preferences continue to shape discussions, with debate around the ECB’s reaction to growth and inflation risks seen.
- Markets have previously assumed that harsher tariffs from the U.S. would promote a dovish ECB reaction function, owing to economic growth worries.
- This may have also factored into the modest dovish move seen this afternoon.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.675 | -24.3 |
Mar-25 | 2.401 | -51.7 |
Apr-25 | 2.226 | -69.2 |
Jun-25 | 2.080 | -83.9 |
Jul-25 | 2.028 | -89.0 |
Sep-25 | 1.951 | -96.8 |
Oct-25 | 1.921 | -99.7 |
Dec-25 | 1.894 | -102.4 |
FED: US TSY 17W AUCTION: NON-COMP BIDS $619 MLN FROM $64.000 BLN TOTAL
- US TSY 17W AUCTION: NON-COMP BIDS $619 MLN FROM $64.000 BLN TOTAL
