20.10.202607:47:52UTC+00French Bond Yields Ease After Sharp Rise

France’s 10-year OAT yield eased to 4.9% after Monday’s sharp rise, holding near multi-year highs as political unrest and doubts over the government’s ability to curb the budget deficit continued to dampen sentiment. Investors are also awaiting Moody’s long-anticipated credit rating review on Friday, where a possible downgrade could intensify selling pressure on French government bonds. This comes on top of a broader global bond selloff fueled by renewed inflation worries and expectations of higher-for-longer interest rates.

Authorities have imposed curfews in several cities to contain nationwide anti-government protests, further complicating efforts to push through austerity measures ahead of the 2027 elections. Meanwhile, the National Assembly is scheduled to vote on the revenue component of the 2027 draft budget on Tuesday, though even a favorable outcome would not ensure passage of the full bill. The 10-year OAT–Bund yield spread was little changed at 147 basis points, remaining at its widest level since the eurozone sovereign debt crisis.