Timothy Graf, Head of Macro Strategy for EMEA at financial services provider State Street , comments on the French government:

"We see the current volatility in French politics and widening of spreads as a serious local problem but it likely does not represent an immediate, existential question for Europe. Institutional investor endorsement of French assets has been tepid for the last three months and we continue to see very weak flows in both equities and bonds over recent weeks. Positions have adjusted to a modest extent, but investors are only back to a benchmark weighting – in other words, there is scope to move underweight in both asset classes if risk pricing demands it. The Eurozone is in a different place policy-wise than during its crises years in the early 2010s and is better able to navigate these challenges. As such, we do not see this feeding through to EUR weakness given many peer currencies face similar policy challenges as France. Nevertheless, French assets should hold little appeal in the near-term."