LONDON, March 2 The premium investors demand for
holding French government bonds over German peers shrank to a
fresh one-month low on Thursday, with markets comforted by
presidential election frontrunner Emmanuel Macron's bid to
outline his plans for the economy.
Macron, a former investment banker running as an independent
centrist, is favourite to win the unpredictable race in a May
run-off against far-right leader Marine Le Pen.
He said on Thursday he would root out inequalities in
France's pension system, sell government stakes in major firms
and downsize parliament as he sought to silence critics who say
his bid is thin on substance.
"Any significant candidate, whether that's Macron or
(Francois) Fillon, that highlights they have a plan is likely to
be viewed as positive by markets," said Rabobank strategist Matt
"This not only reduces the chance of a Le Pen victory but
outlining a concrete plan for the economy defuses the market
sensitivity to fragmentation risk in the euro zone that is
implied by a Le Pen victory."
The French/German 10-year bond yield gap tightened to around
58 basis points , falling below the
60 bps mark for the first time in a month.
(Reporting by Dhara Ranasinghe, editing by Nigel Stephenson)