UBS has revised its forecast for the Franco-German spread, now expecting it to reach 90 basis points in October, up from an earlier estimate of 70-80. The bank cites political and fiscal uncertainties as factors preventing OAT spreads from returning to previous lows, despite the resilience of French bonds due to disinflation and a strong institutional investor base. Clients in Paris express mixed views on the outlook for OATs, with a general consensus on the risk of further spread widening.
