French bond yields reach 5%
France's 10-year government bond yield reached 5.002% on October 21, its highest level since 2002.
The yield premium over comparable German government bonds widened to 157 basis points, approaching levels last seen in 2011.
The increase reflects concerns about political instability, widespread protests and the French government's ability to reduce its budget deficit. Elevated global energy prices and tighter monetary policies have also increased borrowing costs.
The widening spread between French and German bonds indicates growing investor concerns about France's fiscal outlook. Persistently high yields could increase public debt servicing costs and contribute to volatility across eurozone sovereign bond markets.
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