The jolt proved less brutal for the Paris Bourse (-1.35%) than for our bond market, which suffered one of the biggest corrections of the year, with a tension of +12Pts 'gross' and +7Pts relative to the Bund or the Dutch '10-year'.

Yesterday's shock at the results of the European elections and the announcement of the forthcoming dissolution of the French National Assembly was inevitable, and can naturally be explained by the political and economic uncertainty it triggered.

President Macron's decision - unexpected for our fellow citizens, but not for his entourage - overshadows the markets' main preoccupation, namely the Federal Reserve meeting scheduled for Wednesday.

'In an extremely short campaign, everything suggests that the RN will be the leading party in the future Assembly', forecast the teams at Oddo BHF.

Logically, the President should appoint the Prime Minister from this party and prepare for a 'cohabitation'," predicts the private bank.

The French 10-year yield rises by 12.6 basis points to 3.237% after the elections, and the German bond by 5.7 basis points to 2.672%.
Italian BTPs (+12Pts to 4.076%) follow the same pattern as our OATs, for the same reasons, namely a large victory for Giorgia Meloni's party.
No elections were held across the Channel, but Gilts deteriorated sharply by +11.4pts to 4.378%.

Across the Atlantic, at the end of a day devoid of 'macro' stats, T-Bonds deteriorated by +4Pts to 4.47% 48 hours ahead of the FED's final statement, with rates expected to remain unchanged at 100%, and at 60% until the 4th quarter of 2024.


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