PARIS, March 29 (Reuters) - French OAT government bonds are likely to underperform German bunds due to the uncertain political climate caused by protests against the French government's pensions overhaul, wrote Goldman Sachs in a research note.
"Taken together, we think that the combination of slower reform progress and lingering political uncertainty is characteristic of the French semi-presidential system under a hung Parliament," wrote Goldman Sachs.
"We therefore reiterate our cautious view on France in the medium term and our rates strategists continue to expect OATs to underperform Bunds," added the U.S. investment bank.
France's Constitutional Council said earlier on Wednesday it would issue a much-awaited verdict on April 14 on whether the government's plans to increase the state pension age are in line with constitutional rules.
The plan by President Emmanuel Macron to delay by two years, to 64, the age at which people can draw their state pension has met fierce opposition from workers and trade unions, with another nationwide day of strikes and protests set for April 6. (Reporting by Sudip Kar-Gupta Editing by Mark Potter)
