UBS Maintains Positive Outlook on French Government Bonds
UBS analysts expect the French budget to pass by year-end and assert that France is not defaulting despite current market volatility.
Financial services firm UBS maintains a positive outlook on French government bonds, asserting that "France is not defaulting" despite current market volatility. The firm currently notes a spread of 127 basis points over German bonds but expects this to decrease once the French budget passes by the end of the year.
Analysts at the firm believe the budget will pass, stating "the budget will pass," which should stabilize the market. While they view the bonds as attractive for investors holding them to maturity, they acknowledge risks regarding the national debt trajectory and upcoming elections. Specifically, the firm predicts increased tension will occur between April 18 and May 2 of next year.
