French borrowing costs kept rising on Thursday as investors worried the government will struggle to pass its budget after public protests. The 10-year French bond yield climbed to 5.089%, its highest since July 2022, and the spread over German bonds reached its widest in almost 15 years. For the first time since 2013, French 10-year yields rose above US Treasuries, as a parliamentary deadlock blocked Macron's plan to raise the pension age from 62 to 64 and planned spending cuts. The 2025 budget deficit was 5.1% of GDP and debt was 115.6% of GDP, and ING expects the ECB to stay on hold next week.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on theguardian.com ↗
Keywords
Open a keyword to see other news on the same topic.
Related tickers and likely impact
EUR/USD
▼ Likely negativeRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/21/2026 | 1.12328 |
| Change that session | -0.04% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- French Bond Yields Explode To 24 - Year High As Unrest And Fiscal Crisis Collide
French 10-year government bond yields jumped to 5%, the highest since 2002, as social unrest, political gridlock and deteriorating public finances collided. Moody's is set to review France's Aa3 rating by the end of the week, with a negative outlook already in place as the government struggles to pass its 2027 budget. The 10-year yield spread between French and German bonds neared 160 basis points, levels not seen since the Eurozone debt crisis. The article cites a 5.4% public deficit this year and national debt at 119%, its highest since 1946, and a Deutsche Bank economist who ranks France the most vulnerable of 18 euro-area economies. Citigroup strategist Jamie Searle said the country-specific risk premium had entered “uncharted territory.”
- French Bonds Keep Climbing as Unrest Mounts. The Benchmark Note Passed 5% For The First Time Since 2002.
French Finance Minister Roland Lescure said the government will implement spending cuts even if lawmakers do not approve them, as the 2027 budget is negotiated amid protests that have turned violent. The benchmark 10-year OAT topped 5% for the first time since 2002 during the session before paring some gains. Nobel laureate Paul Krugman said France is on a fiscally unsustainable path and may have become “too big to save,” noting the deficit is expected at 5.1% of GDP, the same as 2025, rising to 5.7% in 2027, and that France is under the EU's excessive deficit procedure. IMF head Kristalina Georgieva urged Paris to “get its house in order” but said the French economy is growing and Europe has a much more mature system than during the euro zone debt crisis. The government will also deploy the Sentinelle force, mainly on static security missions, to free up police for law enforcement.
- French unrest compounds debt crisis fears. Paris-listed stocks, bonds and the euro fall
French assets fell early Monday as social unrest, political instability and rising national debt weighed on markets: the 10-year bond yield jumped 7 basis points, near its highest level in decades, the euro slipped 0.15% against the U.S. dollar, and the CAC 40 fell nearly 1%. The OAT-Bund spread hit its highest level since the early 2010s debt crisis, and French yields now exceed those of Italy and Greece. Weekend protests over living costs and public services turned violent in several cities, with more than 2,000 arrests. Investors are also uneasy about next year's presidential election, where far-right Marine Le Pen leads many polls, and whether Prime Minister Sébastien Lecornu's minority government can pass the 2027 budget. Goldman Sachs' Sharon Bell said the deficit will be hard to reduce without painful measures, though she sees no need for emergency ECB intervention.
- France riots highlight a growing risk for its battered bond market
Worsening unrest in France is adding pressure to its bond market, with OATs among the hardest hit in a global bond selloff driven by inflation fears and debt concerns. Early Monday, the 10-year OAT yield rose 8 basis points to 4.86%, while Germany's 10-year yield was flat at 3.41%. Ninety One warned that if France fails to pass its 2027 budget, its deficit could exceed 6% of GDP next year, more than double the EU's 3% limit, and even passing it would be only a temporary fix. Analysts say pension reform is needed but highly unpopular. Capital Economics expects the French-German yield gap, around 140 basis points, could widen to 200 basis points by the end of 2027.
- France hit by debt sell - off as protests unnerve investors
French bonds and stocks sold off again after weekend protests that saw public buildings burned, hundreds of shops looted and almost 2,400 arrests. President Emmanuel Macron condemned the 'unbridled violence' in a televised address. The 10-year French government bond yield rose 8 basis points to 4.859%, the 2-year to 3.6% and the 30-year to 5.42%, widening the spread over German 10-year borrowing costs. The euro fell 0.4% against the dollar to $1.1197, and the CAC 40 dropped 1.2% in morning trading. With debt at 115.6% of GDP and a 5.1% deficit in 2025, the government's effort to pass next year's budget faces growing political pressure, which could push borrowing higher.
- France Riots Highlight a Growing Risk for Its Battered Bond Market
Unrest in France, with mass protests and looting over living costs and school conditions, shows how hard it may be for the government to rein in spending and restore confidence in its bond market. French OATs have been among the hardest hit in the global bond selloff. The 10-year OAT yield rose to 4.86% while Germany's was flat at 3.41%, widening the gap between the two. Ninety One warned that if France fails to pass its 2027 budget, its deficit could exceed 6% of GDP, more than double the European Union's 3% limit, and even passing it would be only a temporary fix. Capital Economics forecasts the French-German spread could widen from around 140 to 200 basis points by the end of 2027.
Related markets
Latest news
- Musk's wants to merge SpaceX and Tesla: Here's what to know
Musk said SpaceX and Tesla have formed special committees to study a merger, which would be worth about $3.5 trillion combined and would be the largest corporate deal in history. SpaceX, valued at about $2 trillion after a record listing this year, absorbed Musk's AI startup xAI in February, while Tesla is valued at about $1.5 trillion. Musk holds about 82 percent of SpaceX's voting power but only about 20 percent at Tesla. Dan Ives puts the odds of a deal at 90 percent by early 2027, though Musk called the requirement of a majority of all Tesla shares 'quite a high hurdle'. Loyal retail investors hold an estimated 25 to 27 percent of Tesla shares, and legal obstacles appear slight because both companies moved their incorporation to Texas from Delaware.
- CoreWeave and Nebius Stocks Are Crashing. Time to Buy the Dip?
Shares of Nebius and CoreWeave each fell 25% in the week of October 12 to 16. The sell-off stems from the yield on CoreWeave's debt in the secondary market surging to 15%, versus roughly 5% on Treasuries, which pushes the debt into 'distressed' territory and signals doubts about its ability to meet obligations. Nebius sold off in sympathy as a fellow neocloud company. The bigger concern is that both companies must keep issuing debt to fund data centers, and if yields are high at issuance, the assumption of nearly unlimited cheap capital could be challenged. The author says it is unclear whether now is the time to buy.
- Disney’s multiplatform Super Bowl plan frustrates ABC affiliates
ABC station owners are irritated that Disney is airing the Super Bowl across several platforms, including Disney+, ESPN2, NFL Network and ESPNU, even though the game is already on ABC and ESPN. A station group CEO estimates that the combined platforms could cut broadcast ad revenue by up to 35% compared with last year. Local affiliates typically earn about 3% of annual ad revenue from the Super Bowl and pay network owners reverse retransmission fees, but Disney+ lacks geofenced ad insertion, so affiliates cannot sell ads to streaming viewers. Disney says national commercials will be identical on all platforms and that streaming major live events is standard industry practice. Super Bowl LX drew 125.6 million viewers in February.
- Meta’s deal to keep Zuckerberg in California adds fuel to wealth tax debate ahead of election
Meta says Mark Zuckerberg will remain in California for eight years and has created a new stock plan that could help cover his taxes if Proposition 40, a 5% tax on Californians worth over $1 billion, passes on Election Day on Nov. 3. According to a filing released with its third-quarter earnings, Meta will issue non-voting Class C shares starting in January, and Zuckerberg can sell or transfer up to 20% of the shares granted to him without affecting his majority voting control. The filing says Zuckerberg’s leadership is crucial to the company’s growth and its AI ambitions, including Meta Superintelligence Labs. Most of the tech industry opposes the measure, while a recent Citrin-Politico poll found 46% in favor and 43% against, suggesting it may fall short of the majority support it needs.
- Nasdaq sell-off: A momentum unwind 'for the record books'
Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management, calls Thursday’s sell-off in the Nasdaq Composite (^IXIC) a momentum unwind “for the record books.” He says the market spent the first half of 2026 driven by a beta and momentum trade led by semiconductors, but in the third quarter, as rates rose, money shifted into quality stocks. He does not think the sell-off is justified by fundamentals, arguing that institutional portfolio managers swapping out of factor positions can drag down whole baskets of stocks. In semiconductors, spot rental rates for Nvidia Blackwell chips are higher than a month ago, showing tightening compute supply, even as financing costs rise and investors worry about neocloud business models and the rising cost of insuring their bonds.
- Dune launches real-time data feeds covering 200 onchain trading venues
Blockchain analytics platform Dune has launched real-time market data feeds covering more than 200 onchain trading venues, aiming to bring this data into the systems of traditional financial institutions. The feeds draw trade data from 12 blockchains, including Ethereum, Solana and Base, about one second after execution, covering both spot trading on decentralized exchanges and perpetual futures on Hyperliquid and Lighter. Early clients include quant funds, market makers, asset managers and bank trading desks, which use the data to assess liquidity and compare prices, though Dune did not name them. Meanwhile, the tokenized stock market has grown sharply, with distributed value reaching $3.58 billion, but 16 companies, including Microsoft, Alphabet and Goldman Sachs, have objected to their shares being traded on OKXICE’s proposed platform, and liquidity remains fragmented.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.