French 10-year bonds surpass US in yield — The Guardian

In France, the yield on 10-year government bonds rose by nine basis points on Thursday to 5.089%. This is the highest level since July 2022. France’s cost of 10-year borrowing exceeded the yield on equivalent US Treasury bonds for the first time since 2013, The Guardian reports.

The day before, the yield on French 10-year bonds exceeded 5% for the first time since 2002. The gap between the yields of French and German 10-year securities, used as an indicator of the risk premium on French debt, reached its highest level in nearly 15 years.

Budget deadlock

The sell-off in French bonds is taking place amid the government’s difficulties in passing next year’s budget. The parliamentary deadlock has also blocked President Emmanuel Macron’s plans to raise the retirement age from 62 to 64 and introduce a number of measures to curb public spending.

France’s budget deficit in 2025 stood at 5.1% of GDP, while the country’s debt was 115.6% of GDP. France is also facing higher inflation, which the source links to the war in Iran.

More current news is available on the UA.News Telegram channel Telegram.

Impact on the European market

Deutsche Bank strategist Jim Reid said that the sell-off in French government bonds has begun to affect other countries as well. The yield spread of Italy’s 10-year bonds over German bonds increased by 3.8 basis points to 116 points, while Spain’s rose by 3.1 points to 66 points. For Spain, this is the highest level since June 2025.

ING economist Carsten Brzeski believes that rising yields have reinforced the European Central Bank’s restrictive monetary stance. In his assessment, the ECB will likely leave its rate unchanged next week and postpone a decision on its next increase until December. In September, the central bank last raised its key rate to 2.5%.

Protests and detentions

Market volatility is also occurring after mass protests that escalated into clashes with police in Paris, Bordeaux, Nice and Marseille last weekend. Tens of thousands of people initially took part in peaceful marches demanding more teachers and repairs to neglected schools. During the unrest, public buildings were attacked, and thousands of shops and businesses were looted. The Interior Ministry reported nearly 2,400 detentions.