0327 GMT - The recent selloff in French government bonds reflects both carry-trade unwinds and a growing reassessment of French fiscal risk, says State Street Investment Management's Masahiko Loo. Hedge funds and active real-money investors unwinding carry positions helped amplify the move amid recent political headlines, the strategist says in a note. "The bigger issue is that bond investors are increasingly questioning France's fiscal trajectory." France hasn't run a budget surplus since 1974, and while policymakers have signaled their intention to address fiscal challenges, the timeline and details are likely to face significant implementation hurdles. Volatility is likely to remain elevated into the April-May 2027 presidential election cycle, Loo says.