French bond risk spiked past 150 basis points to 153, the highest since October, as investors grew wary of the government’s fiscal outlook amid budget deficit struggles and cost‑of‑living protests. The spread, which peaked at 159 bps earlier this month, reflects political pressure and a wave of attacks on public buildings over the weekend, prompting many to liquidate French debt positions. Market strategist Karen Ward notes that bond markets now wield greater power, charging higher yields when trust erodes.
Despite easing protests and tighter security, France’s debt burden exceeds GDP and one of the euro area’s largest deficits limits spending. The 10‑year yield stayed near 4.94% while German bunds fell three bps to 3.43%. Black Rock strategists warn that the French selloff shows how competition for capital is reshaping fixed‑income markets, urging investors to assess whether yields adequately compensate for heightened risks.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing