French Bonds Will Sell Off Further: 3-Minutes MLIV

• French long-end yields are lower, but the analyst expects 'the worst of the French stress' is yet to come, with no easy solutions and further bond sell-offs likely.
• The Euro is predicted to experience 'more Euro downside' against crosses and the dollar, continuing its recent downtrend.
• Brazilian markets saw extraordinary rallies in stocks and currency following Bolsonaro's strong showing, but short-term profit-taking is anticipated ahead of the second-round vote on October 25th.
• US Treasury yields are structurally expected to reach a 6% handle, with the analyst admitting his recent tactical calls for a rally were 'horribly wrong'.

The discussion focuses on European market volatility, particularly in France, where further bond market stress and Euro depreciation are anticipated. Brazilian markets are rallying on Bolsonaro's lead, but short-term profit-taking is expected before the second round of elections, though the long-term outlook is positive. US Treasury yields are structurally expected to rise further, despite recent tactical misjudgments.