French Debt Premium Hits 177.7 Bps, Reaching 15-Year High as Bunds Draw Safe-Haven Flows
Updated
Updated · Reuters · Oct 22
French Debt Premium Hits 177.7 Bps, Reaching 15-Year High as Bunds Draw Safe-Haven Flows
3 articles · Updated · Reuters · Oct 22
Summary
France’s 10-year OAT-Bund spread widened to 177.7 basis points, its widest since November 2011, while the 10-year French yield rose 6.5 bps to 5.06% after touching 5.1415%.
Investor pressure persisted despite stronger October industrial sentiment, with strained public finances, street protests, election uncertainty and budget-passage difficulties driving the selloff.
German Bunds rallied at the same time, pushing the 10-year Bund yield down 7 bps to 3.34%, as markets sought safety and wider euro-zone spreads hit Belgium, Italy, Spain and Greece too.
Money markets still price roughly three ECB rate hikes by late 2027, and analysts said the bar for ECB intervention in French bonds remains high unless contagion becomes disorderly.
Higher oil and gas prices are adding to borrowing-cost pressure on indebted euro-zone states, even as economists say Europe’s crisis defenses are stronger than during the early 2010s debt turmoil.