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2026-11-02 18:12:24
[Falling Oil Prices Drive Down French Bond Yields, Rating Outlook Remains Under Pressure] ⑴ The yield on French 10-year government bonds fell to 4.9%, following a further decline in oil prices, despite lingering concerns about the country's fiscal outlook. ⑵ The decline in oil prices was attributed to reports that US President Trump, following Tuesday's midterm elections, was willing to give Iran more time for diplomatic channels before considering resuming military strikes. ⑶ Meanwhile, Fitch revised its rating outlook for France to negative, citing factors including deteriorating public finances, high government debt, rising borrowing costs, weak growth, and political uncertainty. ⑷ Fitch expects France's public debt-to-GDP ratio to rise from 115.7% in 2025 to 124% in 2028, with the budget deficit projected to remain at 5.5% next year, above the government's 5% target. ⑸ Elsewhere, the European Central Bank kept interest rates unchanged on Thursday. President Lagarde confirmed that a rate hike had been discussed, but policymakers unanimously decided to maintain borrowing costs, noting that tighter financial conditions would help curb inflation.
