French assets continued to fall for a second consecutive day, raising concerns about political instability.

As French Prime Minister Francois Beru decided to initiate a vote of confidence, the market continued to be turbulent, with French assets being sold off the next day. French CAC 40 index futures fell by 1%, after the index had already dropped by 1.6% on Monday. At the same time, the yield spread between French and German 10-year bonds widened by 3 basis points to 78 basis points, higher than the 70 basis points over the weekend. This spread is on track to reach its highest closing level since April. Beru stated on Monday that President Macron had agreed to convene a parliamentary meeting early in order for the government to present its fiscal plan and hold a vote of confidence. The euro rose by 0.1% against the US dollar to 1.1.631, reversing earlier gains. One-week volatility reached its highest increase in a month, with France's political risks exacerbating this trend. The far-right National Rally, the left-wing France Unbowed Party, and the Green Party have all stated that they will vote against the motion on September 8, while the Socialist Party has indicated it will not support the government. If a majority of members of parliament vote against Beru, he will be forced to submit his government's resignation.