French 10-Year Yield Tops 5%

France’s 10-year OAT yield surged above 5%, reaching a new 24-year high as investors grew increasingly concerned about the country’s fragile public finances and mounting social unrest. The spread over 10-year German Bunds widened to around 155 basis points, its highest level since the eurozone sovereign debt crisis. Global bond yields have climbed this year amid surging energy prices and expectations of further monetary tightening, while highly indebted euro-area countries, including France, face additional pressure from rising borrowing costs and growing debt burdens. Meanwhile, the country's minority government faces a difficult task in passing its budget and reducing the deficit, amid parliamentary divisions, widespread protests and uncertainty ahead of the 2027 presidential election. Investors are also awaiting Moody’s long-anticipated credit rating review on Friday, with the risk of a downgrade adding to pressure on French bonds.