Moody's Affirms France's Aa3 Sovereign Credit Rating With Negative Outlook

Moody's has maintained France's sovereign credit rating at Aa3 while keeping a negative outlook, providing relief to President Emmanuel Macron's administration amid fiscal deficits and political friction. Market participants had broadly anticipated a downgrade following earlier cuts by S&P and Fitch. France faced mounting pressure as its 10-year government bond yield surpassed 5%, touching 5.14%—the highest level since July 2002—and widening the spread against German Bunds to a 15-year peak. Moody's affirmed the rating on the assumption that a deficit-reducing budget with €43 billion in cuts and tax hikes will pass.