Citigroup: Any breath-like Rebound triggered by the French election may be "short-lived"

FX678 data, July 5th, according to today’s report, Citigroup expects that if the second round of voting in the French parliament this weekend ends with no majority party, any breathing Rebound in the euro credit bond market will be “short-lived”. After the announcement of the results of the first round of elections last weekend, Citigroup economists and Interest Rate strategists believe that the final result will either be a parliament with no majority party or majority support for Le Pen’s National Rally, strategist Srikanth Sankaran wrote. In the former case, Citigroup expects the credit market to return to the Fluctuation state for most of this year; but Sankaran said that even in this relatively mild basic prediction, it is very likely that the interest spread will further widen before the end of the year. “If the National Rally wins clear majority support and implements its full agenda, we believe that credit spreads can retest the widest level in 2023.”