What next for France as riots rattle markets? Three questions facing investors ahead of more protests

France's recent riots have sent shockwaves through the markets, with bond yields surging to a 24-year high. This development has significant implications for investors, who are now reassessing their exposure to French assets. The country's budget and growth prospects are under scrutiny, as investors weigh the potential impact of ongoing protests on the economy.

The unrest has raised concerns about the government's ability to implement its economic agenda, including planned pension reforms and tax cuts. This uncertainty has led to a widening of spreads between French and German bond yields, making it more expensive for the French government to borrow. As investors await further protests, they are also monitoring the potential sectoral risks, particularly in areas such as energy and transportation.

Looking ahead, investors will be watching for signs of stability and a clear plan from the French government to address the underlying issues driving the protests. Key indicators to monitor include the government's budget announcement and any updates on economic growth forecasts. Additionally, investors will be keeping a close eye on the impact of the unrest on French asset valuations, particularly in the bond and equity markets, to gauge the potential for a sustained market sell-off.

Originally reported by cnbc.com. FundNews adds analysis for finance & markets readers.