ING senior rates strategists Michiel Tukker and Benjamin Schroeder said market relief after Moody's left France's sovereign rating unchanged last Friday is understandable but "the overall situation has not changed." They warned they remain vigilant for further spread widening given substantial political risk ahead. The France 10-year OAT–Germany 10-year Bund yield gap closed at 153 bps on Monday after peaking at 177 bps last week, the widest since 2011. Moody's kept the rating unchanged but main

ING senior rates strategists Michiel Tukker and Benjamin Schroeder said market relief after Moody's left France's sovereign rating unchanged last Friday is understandable but "the overall situation has not changed." They warned they remain vigilant for further spread widening given substantial political risk ahead. The France 10-year OAT–Germany 10-year Bund yield gap closed at 153 bps on Monday after peaking at 177 bps last week, the widest since 2011. Moody's kept the rating unchanged but maintained a "negative" outlook; strategists said France needs "significant and sustained" fiscal effort to avoid a downgrade.