AUDUSD TECHS: Pierces The 50-day EMA

• EUR/USD: $1.1550-60(E1.8bln), $1.1620-30(E1.5bln), $1.1650(E2.1bln), $1.1665(E954mln), $1.1700-10(E1.5bln), $1.1750(E1.3bln), $1.1800(E2.0bln)
• USD/JPY: Y147.00($633mln), Y147.20-25($910mln), Y147.40-50($805mln) Y147.90-05($3.2bln)
• GBP/USD: $1.3350-60(Gbp1.8bln), $1.3484-85(Gbp672mln), $1.3515-25(Gbp903mln), $1.3570-75(Gbp1.1bln)
• AUD/USD: $0.6515-25(A$1.3bln), C$1.3915-25($840mln)
• USD/CAD: C$1.3680-90($1.2bln)
• USD/CNY: Cny7.1669($766mln)

"The United Kingdom Debt Management Office (DMO) announces that the new conventional gilt, which will mature on 22 October 2035, will pay a coupon of 4 3/4% per annum, payable semi-annually. The new gilt will have the ISIN code GB00BTXS1K06 and the SEDOL code B-TXS-1K0; it will pay a long first coupon on 22 April 2026."

"The new gilt is planned for launch by syndication in the week commencing 1 September 2025, subject to demand and market conditions. Further details of this transaction will be announced in due course."

Speaking at the French Democratic Confederation of Labour's summer university in Essonne, PM Francois Bayrou says that members of the National Assembly have "13 days to choose between chaos or responsibility", referring to the upcoming vote on spending cuts that the PM has said is effectively a confidence vote in his administration.

• That Bayrou has called the confidence vote, rather than the opposition calling a no-confidence vote, makes the gov'ts task that much harder. Art. 49 of the Constitution establishes that for a resolution of no confidence, an absolute majority of the National Assembly is needed to remove the gov't. This means abstentions are effectively votes to keep the gov't. However, in a confidence vote called by the gov't, there is not an 'absolute majority' requirement, meaning that abstentions work against the gov't if the votes against expressing confidence are going to exceed those in favour (as looks to be the case on 8 Sep).
• As such, the most likely outcome is the removal of the gov't. The parties of the far-left (Communists and France Unbowed) and far-right (National Rally and Union of the Right for the Republic) have already indicated that they will vote against expressing confidence in the gov't, as have the environmentalist Greens.
• Centre-left Socialist Party (PS) First Secretary Olivier Faure said to Le Monde that it would be "unimaginable" for his party to vote in favour of the Bayrou gov't, and has said his deputies will vote against. The PS has left the door open, saying if the gov't "revises its copy" on spending cuts, then its stance may change. However, this appears unlikely at present as the PS and Greens have talked up the idea of them forming a minority gov't post-Bayrou.  

Chart 1. Prospective Confidence Vote in National Assembly

Source: Le Monde, MNI