The yield on France’s 10-year OAT has climbed above 5%, marking a new 24-year high, as investors grow increasingly uneasy about the country’s fragile public finances and intensifying social unrest. The spread over 10-year German Bunds has widened to about 155 basis points—its highest level since the eurozone sovereign debt crisis—underscoring mounting concerns over France’s relative risk.
Global bond yields have risen this year on the back of surging energy prices and expectations of further monetary tightening. Highly indebted euro-area economies, including France, are feeling additional strain from higher borrowing costs and expanding debt loads. At the same time, France’s minority government faces an uphill battle to pass its budget and rein in the deficit amid deep parliamentary divisions, widespread protests, and heightened political uncertainty ahead of the 2027 presidential election.
Investors are also bracing for Moody’s long-awaited credit rating review on Friday. The possibility of a downgrade is adding further pressure to French sovereign bonds.
