French 10-year risk premium soars to highest since late 2011

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Government bonds worldwide have been under pressure recently given the backdrop of elevated energy prices, rising inflation and higher interest rate expectations, but French debt has been hit even harder by concern about the government's ability to cut spending and improve its finances ahead of the 2027 presidential election.
This difference, or spread, between French and German sovereign bond yields reflects the additional premium investors demand for the risk of lending to the French government rather than the German one over 10 years
The yield on the 10-year Treasury note has surged past its 2007 high, now sitting at 5.34%. At the same time, 30-year US bonds have hit a 24-year peak this week. The rise in global sovereign debt is primarily driven by escalating oil prices amid the ongoing Middle Eastern conflict. Investors are now bracing for potentially further interest rate hikes from central banks.
The German 10-year bond yield was last down 8 basis points at 3.437%, while the French 10-year yield was roughly unchanged on the day at 4.929%
France on Thursday presented its 2027 budget bill, seeking to enact unpopular belt-tightening measures that can lower its deficit
The budget presentation however gave French bonds only little relief, and investors sought out safe havens like German debt
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document fetched 2026-10-03 02:56