Jefferies: Asian investors may ditch French government bonds over political risks

An escalation of France’s political issues could discourage Asian investors from buying French government bonds, Jefferies says in an outlook for 2025, Report informs.

“In our view French bonds could be at risk in the first quarter,” it says.

France is facing political issues with the current government unlikely to be able to pass key reforms and there is a risk of new elections post summer, Jefferies says.

Net French government bond supply increases substantially in 2025, and if there are any rating or political risks on the horizon, “then Asian investors may not be the most willing buyers.”

The 10-year French OAT-German Bund yield trades 1 basis point lower at 84 bps, according to Tradeweb.