COMMODITIES: Corrective Bear Cycle in Gold Remains Intact for Now

After a meeting with caretaker PM Sebastien Lecornu at Matignon, First Secretary of the Socialist Party (PS) Olivier Faure says that "our party cannot back the current budget plan", claiming that "at this moment, we have no guarantee that the pension reform will be suspended." 

• A rollback of the 2023 reforms had been a key demand of the centre-left PS. As noted earlier (see 'FRANCE: Suspension Of Pension Reform Would Risk Intra-Coalition Rancour', 09:04BST), Education Minister Elisabeth Borne had mooted the idea of suspending the reforms to get a budget passed, but this would be controversial within the governing coalition.
• Le Monde reports that the conservative Les Republicains would oppose any reform. A member of leader Bruno Retailleau's entourage said the suspension would be "a red line for the right,". Add to these the objections of former PM Edouard Philippe's centre-right Horizons, and the gov't would lose more seats (a combined 84) if Horizons and LR vote against such a measure than they would gain with the PS coming on board (68).
• While the far-left La France Insoumise and far-right Rassemblement National (RN) both opposed the pension reforms in 2023, it remains to be seen whether they would vote alongside the gov't to suspend them (throwing President Emmanuel Macron a lifeline) or vote against in order to try and force early elections. Speaking in the Auvergne, RN leader in the National Assembly, Marine Le Pen, said she is minded to "censor everything," lowering the prospect of a vote alongside the gov't.

• ERM6 98.50/98.625/98.75/98.875c condor, bought for half in 7.5k.

This has been bought in some 50k this Week.

• "*FRANCE'S FAURE: HAS NO GUARANTEE PENSION REFORM TO BE SUSPENDED" Bloomberg
• "*FRANCE'S FAURE: HAS NO GUARANTEE PENSION REFORM TO BE SUSPENDED" Bloomberg
• 10-year OAT/Bund widening on these headlines. Now back at 84bps (+1bp vs before the news crossed).