Arnaud Girod, head of economics and multi-asset strategy at Kepler Cheuvreux, argues that the bond market could influence French politics by acting as a 'fourth bloc' within the political landscape.

This influence would manifest itself in investors' reactions to France's budget deficit and the political decisions taken.

If investors lose confidence, causing French bond yields to rise, this could put pressure on the French government to adopt tougher fiscal policies. In other words, the bond market would act as a barometer of investor confidence and could potentially push policymakers to adjust their economic policy in response to market signals.

So far, the market has reacted in a measured way to the risks in France, with a modest rise in the risk premium on the bond market. However, Girod warns that there is a risk that this 'fourth block' could become more vocal, perhaps during the summer, if the political situation deteriorates.

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