Macron is running out of rope. The latest chapter in the poltical crisis moves France closer to another legislative election at the very least. If that were to happen then a populist government led by the Rassemblement National would be the result. This is would not be a Merloni Mark II. But a government whose economic policies would violate the EU's fiscal principles and policies. The two other scenarios of Macron appointing another puppet government or of Macron himself resigning (unlikely) offer you a choice of the speed of the French fiscal crisis but no choice about its direction. There is no one in the economic cockpit flying the plane.
Internationally this offers Putin two confirmations in a weekend - the first being the Czech legislative elections (see Odd bins of Sunday, October 5) - that Europe is falling to bits. He would be an idiot if he did not push on that open door of opportunity. Stand by for more escalation from the Kremlin.
Of course the Wealth Protection Portfolio is short French 10 year Sovereign Debt OATS (and long Italian 10yr BTPs as the tether). No news in that. If anything i would increase the French short.
Written on the road in Spain -so no editing
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