French President Emmanuel Macron’s decision to call early national legislative elections took everyone by surprise. Markets were entirely caught off guard. Not a single analyst or commentator had raised an early French legislative election as being a serious possibility. Investors reacted to the news predictably – they dumped French assets. French bonds sold off and markets once again focussed on OAT-Bund spreads, which widened following the announcement (OATs are French bonds and Bunds are German ones). If you cast your mind back by around 12 years, you’ll remember that markets were transfixed with these yield spread developments – in particular…

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