Don't Trust The 'Le Pen Bounce': Goldman Lays Out Three Cheap Tail Hedges For The Next Leg Of France's Bond Rout

For one morning, at least, the French bond market stopped screaming. After Marine Le Pen and Jordan Bardella unveiled a shadow budget aiming to cut spending by more than €140 billion by 2032, and with lower oil and a broader risk bid lending a hand, the 10Y OAT-Bund spread collapsed 12bps to 125bps, the tightest since Sept 30 and a long way from Friday's 159bps, which was the widest since 2011. It was the kind of rally that makes people forget why they were panicking, which is exactly when Goldman's rates desk decided to publish a shopping list of crash insurance.

A Low Bar, Cleared