FRANCE: PS Will Not Vote For Bayrou Gov't Censure-Le Figaro

Jan-16 12:39

Le Figaro reports that the centre-left Socialist Party (PS) will not vote for the censure of PM Francois Bayrou's minority gov't in the National Assembly later today. The censure motion put forward by the far-left La France Insoumise (LFI) and backed by deputies from the environmentalist Social and Ecologist and communist Democratic and Republican Left groups will be debated from 1500CET with a vote expected at around 1730CET (1130ET, 1630GMT). 

  • The censure motion was already set to fail, given that the far-right Rassemblement National (National Rally, RN) has indicated that it would not offer its backing to Bayrou's ouster. The governing groups (the pro-Macron centrist Ensemble and conservative Republican Right) outweigh the leftist New Popular Front (NFP).
  • Nevertheless, the PS' decision marks a notable point in the political timeline stretching since the 2024 legislative elections that ushered in the recent gov't paralysis. Since the election, the PS has voted alongside the rest of the groups in the NFP, which the PS ran in the election as part of.
  • However, by breaking with the more leftist alliances within the NFP it risks a backlash, most notably from LFI and its firebrand figurehead Jean-Luc Melenchon.
  • The PS abstaining on censure could open up the prospect of the party eventually abstaining on or backing the state and social security budgets, although it should be noted the difficulty Bayrou faces in gaining support from the PS and Republican Right on issues such as pension reform, tax and gov't spending cuts. 

Historical bullets

MNI EXCLUSIVE: MNI Speaks to CFIB on Trudeau's Efforts to Avoid US Tariffs

Dec-17 12:32
  • Justin Trudeau's efforts to encourage Donald Trump to lift the threat of a 25% tariff have been set back by the resignation of his finance and housing ministers, Canadian Federation of Independent Business Vice President Corinne Pohlmann told MNI.

EMERGING MARKETS: Price Signal Summary - Bear Leg In Gilts Extends

Dec-17 12:08
  • In the FI space, the current bearish cycle in Bund futures remains in play and the contract continues to trade closer to its recent lows. Sights are on 133.98, 61.8% retracement of the Nov 6 - Dec 2 bull cycle. Clearance of this level would strengthen the current downleg. For bulls, a reversal higher would highlight the end of the correction. First key resistance to watch is 136.01, the Dec 12 high.
  • A strong bearish theme in Gilt futures remains in play and today’s gap lower reinforces current bearish conditions. The move down has resulted in a breach of key short-term support at 93.40, the Nov 18 low. A break of this level strengthens the bear condition and highlights a stronger reversal. Sights are on the 93.00 handle. Initial firm resistance is at 95.05, the 20-day EMA. The contract is oversold, short-term gains would be considered corrective. First resistance is 93.87, the Dec 16 low and gap high on the daily chart.

SPAIN: Bank of Spain Raises 2024 and 2025 GDP Projections

Dec-17 12:05
  • The Bank of Spain has revised up its economic growth outlook by 0.3 percentage points for 2024 and 2025 to 3.1% and 2.5%, respectively in its December projections, while leaving inflation unchanged for both years 2.9% and 2.1%.
  • This year, growth was revised up due to an update from new data in the national accounts and a stronger than expected second half of the year. The 2025 revision benefits from a stronger last quarter of 2024 and the fiscal boost from support measures for the floods in Valencia.
  • Risks  the economy are tilted tp the downside and to upside for inflation due to the potential effects of the new US administration and political crisis in Germany and France. Growth for 2026 is unchaged at 1.9% and inflation was revised a touch to 1.7%.
  • Note that Bloomberg analyst consensus sees 2025 GDP growth at 2.2% - below the Central Bank's projections.