FX markets

Daily Market View 20-10-2025

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1:37

French bonds get downgraded ahead of major data week

1 Minute Market Rundown

S&P downgrade French credit, means France has lost two of the 3 major ratings agencies AA ratings.
Significant releases throughout the week, with UK and US inflation figures coming Wednesday and Thursday respectively.
Week possibly laced with political risk as Trump ramps up Ukraine war peace talks.

EUR-

More trouble for France this week as S&P downgrade French credit because of the risks associated with the budget, that if Macron gets his way, he should be able to get through this week.

Still, fiscal chaos laced with political chaos is the silver bullet for good credit ratings, with France no on peg with Latvia and Chile.

Screenshot 2025-10-20 074442

Taking our eyes away from France and looking across the channel, the UK sees its own CPI figures print on Wednesday, which are currently pitted to see headline inflation rise from 3.8% to 4%. This move to double the BoE's 2% target will likely cause a weakening in GBP if it comes to fruition. It would mark the highest point since December 2024 and stand as a testament that whatever we have been doing to lower inflation since then has failed.

Expect no shortage of "stagflation" articles, a word I'm sick of hearing, but if the hat fits, the UK must wear it.

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