Published research this week leans toward higher Eurozone yields and wider French spreads, with one clear disagreement on where French bonds go next.
The core view across several research notes: the ECB stays on a tightening bias into year-end, with Governing Council member Wunsch signaling further hikes aren't off the table. Analysts point to sticky core inflation that the ECB "cannot ignore" heading into the October meeting and beyond.
On France, multiple research threads flag a deteriorating fiscal picture — French 10-year yields have risen more than any other major developed market this year, the deficit is tracking near 5% versus a 3% target, and maturing low-coupon debt is being refinanced at much higher rates. Researchers also see attractive setups in Italian spreads tightening after September's stress, and in French bank subordinated debt where fiscal noise has widened spreads despite solid balance sheets.
The genuine split: on the French OAT-Bund spread, one camp of analysts expects further widening into French elections, while another argues for a slow grind tighter from ~140bp toward 110–120bp as technical dislocations fade.