UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'French lettuce?'
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Oct 7, 2025 French Prime Minister Lecornu's resignation stirs political waters as Macron demands a 48-hour fiscal solution. Unlike the UK’s Truss crisis, the French bond market remains stable. Investors eye a risk premium on French assets as they await new leadership or elections. Meanwhile, Argentina's currency interventions and potential US support for soybean farmers are discussed, alongside the calm in Europe ahead of Lagarde's comments. Plus, the impact of Trump’s proposed tariffs on imported trucks sparks interest.
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Orderly French Markets Despite Resignation
- Paul Donovan highlights that France's prime minister resigned quickly but the bond market stayed orderly, unlike the UK's Truss shock.
- French assets will need a risk premium while markets await either a new government or possible assembly elections.
Macron Seeks Quick Fiscal Consensus
- Emmanuel Macron asked the resigned prime minister to seek a fiscal plan that could win National Assembly support within 48 hours.
- Rolling current policies on autopilot would not materially worsen France's fiscal position, Donovan says.
Argentina FX Moves And US Soy Aid Link
- Argentina continued foreign exchange intervention while talks with U.S. counterparts were described as constructive but produced no concrete measures.
- U.S. aid to soybean farmers previously supported Argentina's farm sector and more assistance may follow soon.