Market pressure stems from a projected budget deficit of 5.4% of GDP and total debt climbing toward 122% of GDP. Five-year sovereign credit default swaps reached 81 basis points, their highest in 13 years, while luxury titan LVMH is now viewed by some as a safer credit than French government bonds. Analysts are debating whether the ECB can activate its Transmission Protection Instrument, though some argue France's deteriorating country-specific fundamentals disqualify it from such intervention.
Wednesday, October 21, 2026
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French Bond Spreads Reach 159 Bps in Widest Gap Since 2011
Global Markets19 days ago
A wave of forced liquidations by hedge funds triggered a volatile selloff in sovereign debt on Friday, pushing yields to their highest point in 24 years. French 10-year government bonds touched 4.989% while the yield spread against German bunds peaked at 159 basis points, the widest gap since the 2011 Eurozone debt crisis. Borrowing costs retreated to 140 basis points by the end of the session, though France now pays more to borrow than Italy and Greece, marking an unprecedented reversal in the euro era.
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