EM ASIA CREDIT: Swire Properties (SWIPRO, A2/NR/A) rating affirmed

A court is delivering a verdict that could have significant implications for the direction of France's politics in the years ahead. Marine Le Pen, figurehead of the right-wing Rassemblement National (National Rally, RN), and others from the party are accused of embezzling funds from the European Parliament. If found guilty, prosecutors have asked that, as well as a large fine and a custodial sentence, that Le Pen is barred from seeking political office for five years. This would rule her out of the 2027 presidential election, a race in which she is currently the frontrunner. 

• The court session got underway at 1020CET, and is expected to last around two hours. It is unclear in what order the judges will deliver verdicts on each of the 24 individuals charged.
• An appeal would be immediate in the event of a guilty verdict, but even this would not remove the bar. A recent Constitutional Court ruling declared that an individual can be declared ineligible to run for office even if they have launched an appeal and during that process, they would remain ineligible. There is some language in the wording of the ruling, regarding judges balancing the ineligibility ruling with the 'freedom of voters'. In any case this process likely results in a furious political storm, but the outcome is as yet unclear. 

Goldman Sachs note that “despite relief on the day of the spring budget update, long-end yields ended the week little changed. Gilt sales for 2025-26 came in slightly below our expectations, but this is likely to be revised higher given recent slippage vs. the current financial year budget estimates”.

• They suggest that “as important was the signal on long-end issuance, where the DMO indicated the lowest share for long-end gilt issuance on record. In addition, the introduction of “programmatic tenders”, expected to be aimed at off-the-run gilts, suggests a willingness to more actively manage the curve and benefit from distortions”.
• Still, they note that owing to the “upside risks to issuance and the larger ‘unallocated’ share of gilts (which historically has led to a higher skew of long-end issuance), the relief for gilts was short-lived, and saw us stopped out of our 10s30s flattening recommendation”.
• Looking forwards, Goldman continue “to think the combination of gradual cuts and more responsiveness to reduced long-end demand from the DMO should eventually compress risk premium and flatten the UK curve”.

• MNI: UK JAN M4 MONEY SUPPLY +0.2% M/M, +3.8% Y/Y