FRANCE: Opposition Criticise Budget After PM Outlines 2026 Proposals

Jul-16 08:33

Opposition politicians have been lining up to criticise the budget proposals announced by PM Francois Bayrou on 15 July. There is a strong likelihood that, given the gov'ts minority status, Bayrou will have to push the budget through using Article 49.3 of the French constitution in order to avoid a vote. 

  • Budget rapporteur for the National Assembly, Charles de Courson, said that he would not vote in favour of the proposals, arguing the measures fall too harshly on workers without businesses being asked to contribute. De Courson said the Liberties, Independents, Overseas and Territories (LIOT) group would meet later this morning to discuss the budget, but "I would be surprised if many of our colleagues voted for this type of proposal," and that "We will discuss whether to vote for the motion of censure."
  • Sebastien Chenu, vice-president of the right-wing Rassemblement National (National Rally, RN), told FranceInfo that "Francois Bayrou, with this kind of proposal, will face a full-blown censure," calling the budget a "stab in the social contract."
  • Speaking to BFM-TV on the evening of 15 July, First Secretary of the Socialist Party (PS) Olivier Faure said that "on the current basis, the only possible perspective is censorship". Support from the PS would likely prove one of the only paths for the budget passing in the National Assembly. Former President, now PS Deputy Francois Hollande, is believed to oppose Bayrou's censure, arguing that the PS should focus on the 2027 elections instead. 

Historical bullets

FOREX: FX OPTION EXPIRY

Jun-16 08:24

Of note:

EURUSD 4.3bn at 1.1540/1.1600.

USDJPY 4.85bn at 145.00 (a little far).

USDCAD 1.35bn at 1.3600 (wed).

EURUSD 1.88bn at 1.1600 (thu).

  • EURUSD: 1.1500 (1.95bn), 1.1540 (407mln), 1.1550 (435mln), 1.1565 (856mln), 1.1580 (741mln), 1.1600 (1.79bn), 1.1650 (721mln), 1.1700 (4.57bn).
  • USDJPY: 145.00 (4.85bn).
  • AUDUSD: 0.6455 (476mln), 0.6505 (302mln).

BONDS: Off Lows On Cross-Market Cues, Curves Steeper

Jun-16 08:18

The weakness in core global FI markets stalls a little in recent trade, seemingly driven by cross-market inputs, with crude oil futures ticking to fresh session lows and Friday’s high in Euro Stoxx 50 futures holding.

  • Core global FI curves still bear steepen on the day.
  • No readthrough from comments from ECB’s Nagel & de Guindos.
  • ECB pricing remains biased towards 1 further 25bp cut in the current cycle, while BoE pricing shows ~45bp of easing through year-end.

SWEDEN: New 3-year EUR SGB Benchmark

Jun-16 08:15

"The Kingdom of Sweden, rated Aaa/AAA/AAA (all Stable) by Moody's/S&P/Fitch, has mandated Danske Bank, Goldman Sachs Bank Europe SE, J.P. Morgan and SEB to lead manage its forthcoming 3-year (due 26 June 2028), fixed rate, EUR-denominated, RegS, syndicated benchmark transaction. The transaction will be launched in the near future, subject to market conditions."

From Market source