France deploys 70,000-plus police and bans marches as bond yields hit 24-year high

More than 70,000 police officers and gendarmes are deployed across France for Saturday’s October 24 demonstrations, as French borrowing costs hit their highest level since 2002 and a budget fight deepens investor alarm.

Interior Minister Laurent Nunez said the deployment represents 20 percent more officers than the previous weekend. The elite police unit RAID will support operations but will not be directly involved in crowd control. President Emmanuel Macron said trade union protest requests would be examined by local authorities, while demonstrations by other groups would be banned wherever possible. Marches were prohibited in downtown Montpellier, Rouen, and Nice, and banned in Lyon city centre. A union march in Marseille was authorised under strict conditions. The bans triggered an uproar. “This security escalation comes at the expense of our freedoms, seriously endangering the right to demonstrate peacefully and raising fears of a further escalation of violence in our country,” Amnesty International France said.

In Paris, a coalition of unions is due to march from Porte d’Italie to Porte de Vincennes along the Boulevards des Marechaux between 1pm and 7pm. The originally negotiated central route between Place de la Bastille and Place de la Nation was banned. At least 24 metro stations were closed at the request of the police prefecture. The Louvre, the Musee d’Orsay, and Art Basel Paris closed their weekend programmes for the day.

The protests began in mid-September when high school students blockaded their schools over dilapidated buildings and teacher shortages, as well as what they saw as an unfair system for accessing higher education. The movement has since swelled to encompass wider discontent over the cost of living and inequality. On October 17, more than half a million people took to the streets, following calls from student organisations and remnants of the Yellow Vest movement, which is involved in or connected to the current protests. More than 2,000 people were taken into police custody. Thousands of businesses were damaged or ransacked.

Macron met student movement representatives on Friday for the first time since the protests began, promising more teachers and a deep overhaul of Parcoursup, the university admission system. Student representatives called for further mobilisation until the government presents concrete actions. The meeting failed to defuse tensions. France approaches a presidential election in approximately six months. Macron is constitutionally barred from seeking a third consecutive term and will leave office in 2027. Recent polls place Marine Le Pen as the leading contender by a wide margin. Her National Rally is holding its party congress on Saturday in Orleans, marking the start of its presidential campaign. Authorities expect 20,000 to 30,000 people to join a counter-demonstration against the far-right party in Orleans.

Bond yields at 24-year high as budget fight looms

Alain Durré, head of EMEA economic research at Natixis CIB, said the unrest raises two key red flags for markets. “First, the risk that prolonged disruption drags on GDP growth. Second, fears that political pressure could derail government plans for critical spending cuts ... Either way, that would widen the deficit and blow past the government’s 5% GDP target.” The yield on benchmark 10-year French government bonds, known as OATs, climbed 11 basis points Thursday to its highest level since 2002. The spread over 10-year German Bunds reached its widest level since November 2011. Moody’s on Friday kept its Aa3 credit rating on France, deeming it “high grade,” but maintained its negative outlook. “The negative outlook reflects the increased risk that the fragmentation of France’s political landscape will continue to impair the functioning of the country’s legislative institutions,” Moody’s said. The government aims to reduce the budget deficit to 5 percent of GDP in 2027, from a projected 5.4 percent in 2026. The National Assembly is due to resume debating the budget’s tax measures on October 27. Opposition lawmakers are resisting the plans. “It remains unclear whether the 2027 budget will clear parliament,” said Matthew Ryan, head of market strategy at Ebury. “Even if it does, it seems set to be so riddled with concessions to both the left and the right that the deficit problem is left insufficiently addressed.”

Carrefour shares plunged more than 14 percent Wednesday after the supermarket giant cut its profit outlook and reduced investment, citing the unrest and rising energy costs as a drag on consumer sentiment. CEO Alexandre Bompard said the country faces an “unprecedented situation.” France’s CAC 40 has fallen 4.5 percent over the past month. ING identified retail, hospitality and tourism, and transport and logistics as the sectors most directly exposed to the turmoil. Charlotte de Montpellier, senior economist for France and Switzerland at ING, said the unrest “adds another layer of uncertainty” and “reinforces the perception that any future government will find it difficult to deliver the reforms and savings required.” ING expected French GDP growth of 0.3 percent in 2026 and 0.6 percent in 2027 before accounting for further unrest. Consumer sentiment was already near historic lows before the latest protests.

A union-backed national day of strikes and protests is set for November 5. Student representatives are also calling for further mobilisation.