07:16 AM EDT, 10/06/2025 (MT Newswires) -- French bonds are getting hit by the latest political crisis in the European country, said Scotiabank.

Spreads over 10-year bunds are about 5bps wider and the CAC40 is underperforming with a 1.5% drop, noted the bank.

The catalyst is that yet another French prime minister -- this time Sebastien Lecornu -- has resigned only a few weeks into the job, stated Scotiabak. 3

Lecornu wasn't terribly successful at steering budget proposals, but the tipping point was when the opposition, as well as a key figure from the center-right, lashed out at President Emmanuel Macron's appointment of essentially the same cabinet amid demands for fresh faces, added the bank.

France remains paralyzed by political dysfunction that is preventing fiscal reforms, according to Scotiabank.