Plus ça change, plus c'est la même chose.
The more things change, the more things stay the same.
That was the market’s reaction to the latest French prime ministerial resignation — this time Sébastien Lecornu clearing his desk on Monday, just 26 days after taking office and only a few hours after unveiling his cabinet.
While some political commentators were quick to draw comparisons with Liz Truss’s stint as the UK’s shortest ever serving UK prime minister, bond markets were far more blasé — and they had reason to be.
For one, nothing much had changed for the French fiscal outlook — certainly not in a way for fixed income markets to re-evaluate their positioning. As one market player said, the Street already had all the protection it wanted.
Hence why French government OAT spreads to Bunds widened, yet failed to break above the highs of earlier this year.
The latest twist in French politics had just brought more of the same as far as bond traders were concerned.
By contrast, it was the shock of Truss’s fiscal bomb, not to mention wrong-sided positioning, that shook the Gilt market in October 2022.
Elsewhere, fears about the impact of French politics on the European Union’s scheduled visit to the bond market on Tuesday proved unfounded. The EU secured a big order book and priced its deal at a tight spread.
That success, amid the floundering French political backdrop, only served to elevate the EU's status as a liquid, well established and robust issuer.
Looking ahead, some argue it is technical factors — the balance of supply and demand — that will be the biggest driver of bond performance into year-end.
That is because many public sector issuers, such as supranationals and agencies, are already well advanced in their funding programmes for this year.
Those issuers did well to avoid the political gyrations afoot as we head to the end of the year, but on this evidence, they won't need to be nearly so cautious around France in 2026.