German Bunds Remain Supported by Safe-Haven Demand

Germany’s 10-year Bund yield held just above 3.4%, supported by safe-haven demand, while French and other highly indebted euro-area bonds remained under pressure from fiscal concerns and political uncertainty. The spread between French OATs and German Bunds widened beyond 155 basis points, its highest level since the eurozone sovereign debt crisis. Global bond yields have risen this year amid surging energy prices and expectations of tighter monetary policy. France has come under particular pressure, with its 10-year bond yield reaching a fresh 24-year high amid mounting fiscal concerns and social unrest. Anti-government protests and budget negotiations in a deeply divided Parliament have raised doubts about the government’s ability to implement deficit-reduction measures ahead of the 2027 presidential election.