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1h ago

French Markets Sink After Bayrou Sets Sept. 8 Confidence Vote

Fiscal uncertainty is driving up funding costs, with France’s 10‑year yield near 3.50%.

Image
La salle de contrôle d'Euronext, société qui gère la Bourse de Paris
Des opérateurs à la Bourse de New York le 15 août 2025
Des cours de la Bourse de Paris affichés dans le bâtiment d'Euronext à La Défense, le quartier d'affaires de Paris, le 10 mai 2024

Overview

  • The CAC 40 fell 1.59% on Monday and dropped a further 1.9% at Tuesday’s open in Paris.
  • Financials led the selloff, with BNP Paribas down about 6.2%, Société Générale 6.3%, Crédit Agricole 4.5% and AXA 6.5% around 09:30 local time.
  • Prime Minister François Bayrou called the vote after opposition parties rejected roughly €44 billion in budget savings, leaving the government’s survival in doubt on 8 September.
  • France’s sovereign spread over Germany widened to roughly 0.77 percentage point as the 10‑year yield reached about 3.50%, nearing Italy’s 3.57%.
  • Analysts warned markets are pricing a potential rating downgrade ahead of a Fitch review on 12 September, with broader risk appetite also tied to upcoming US data and Nvidia earnings.