0621 GMT - Tighter French bond yield spreads in the wake of the government's 2026 budget proposal signal greater optimism over the government's stability, Danske Bank's Asger Wilhelm Dalsjo says in a note. Besides the intention to lower France's budget deficit, Prime Minister Sebastien Lecornu also announced the suspension of the pension reform until the presidential elections in 2027, meeting a key demand from the Socialists. "While we see these developments as positive in the short term, a complete reversal of the pension reform would place additional strain on France's already weak public finances, which rating agencies would see as negative," the assistant analyst says. The 10-year French OAT-German Bund yield spread trades at 78.7 basis points, down 1.2 basis point, according to Tradeweb. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

October 15, 2025 02:22 ET (06:22 GMT)

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