FX.co ★ French Bonds Ease as Bayrou Faces Confidence Vote

France's 10-year government bond yield has edged closer to 3.4%, marking its lowest point since August 22. This shift reflects the market's anticipation of Prime Minister Francois Bayrou’s upcoming confidence vote on Monday. The general expectation is that the reaction will be minimal, as the possibility of the government’s collapse has already been largely anticipated, especially following the opposition's commitment to vote against Bayrou soon after he proposed the confidence motion late last month. Meanwhile, focus is also directed toward Thursday’s meeting of the European Central Bank, where policymakers are expected to maintain interest rates for the second time in succession, given that inflation targets are currently being met. Across the Atlantic, US investors are closely monitoring the upcoming inflation report. This follows recent labor market data that fell short of expectations, bolstering predictions of a potential Federal Reserve rate cut in September.