EGBS: Bunds Better Bid Overnight, But Fade Through European Open

French Prime Minister Sébastien Lecornu has presented his resignation to President Emanuel Macron after a broadly unchanged government Lecornu named on Sunday evening was criticised by party leaders from both the right and the left. Bloomberg reports that Lecornu will deliver press remarks in Paris at 10:45 CET, 09:45 BST, 04:45 ET. 

• Politico described Lecornu's government as "a sign that the political forces represented in Macron's successive administrations remain broadly the same, despite Lecornu's being the French president's fifth prime minister in less than two years.”
• Lecornu’s resignation comes after a Friday move to rule out using Article 49.3 of the French constitution to pass a budget without a parliamentary vote, and a parallel bid to agree on a ‘non-aggression pact’ between competing parties failed to ease concerns with Socialists.
• Le Monde reports, “Over the weekend, Lecornu sent a letter to the leaders of Macron's centrist camp and LR pleading for unity. "With only a very narrow majority, the government will have to make compromises with other political groups, without abandoning its convictions.”
• Socialist Party leader Olivier Faure said this morning, "The prevailing sentiment is one of dismay ... The reality is that we are witnessing an unprecedented political crisis."
• National Rally President Jordan Bardella said, "There can be no return to stability without a return to the polls and without the dissolution of the Assemblée Nationale,"
• Mathilde Panot of the leftist Insoumise party wrote on X, “we demand the immediate examination of the motion filed by 104 deputies for the impeachment of Emmanuel Macron.”

• Despite the Dollar Bid, Gold is still acting as a much better Safer Haven, at a new all time record high, next projection comes at $3987.3 - 2.236 proj of the May 15 - Jun 16 - 30 price swing.
• But the Globe will be fixated on the big Psychological $4000.00 round number.

Highlights from Lane:

• "Striking the balance between the baseline assessment and the risk assessment in determining the monetary policy decision at any given meeting is not straightforward"...."it is highly context-specific as to: (i) whether the risk assessment should call for a “wait and see” approach or, alternatively, trigger an immediate response due to insurance-type risk management considerations; and (ii) whether a rate move should be attenuated or amplified by risk considerations."
• "In the coming weeks and months, it makes sense to follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance"
• "In addition to the evolution of the baseline inflation outlook, shifts in the risk distribution will also matter for our rate decisions: an increase in the likelihood or intensity of downside risk factors would strengthen the case that a slightly-lower policy rate might better protect the medium-term inflation target; alternatively, an increase in the likelihood or intensity of upside risk factors would indicate that maintaining the current policy rate would be appropriate in the near term"

On the Euro, Lane notes that: "a persistent movement in the euro on average has a multi-year impact on economic activity and inflation"

• "However, these effects will be larger than the average if euro appreciation is more due to external factors (such as weakness in main trading partners or portfolio rebalancing due to an increase in the risk premium in overseas financial markets) and smaller than the average if more due to domestic factors (such as a surge in domestic demand or a decline in the domestic risk premium)."