The gap between French and German government borrowing costs widened to its widest since the eurozone debt crisis on Friday, as fiscal worries in France rattled bond and currency markets already shaken by a global sell-off.
The spread between the German and French 10-year sovereign bond yields pushed past 154 basis points, the widest since 2011, according to Reuters reporting cited by Channel News Asia. France's 10-year yield stood at 4.927 per cent, while the German 10-year yield — the eurozone benchmark — fell 12 basis points as investors preferred the relative safety of German debt.
"I wouldn't call it a crisis yet, but it looks like it has the potential to be one," said George Lagarias, chief economist at Forvis Mazars. "If it goes on for a couple more weeks then we'll be talking about a crisis in the bond market."
Relief elsewhere
The French underperformance came on a day when global markets otherwise found some relief. The benchmark US 10-year Treasury yield fell 6 basis points to 5.1717 per cent, down from a 24-year high of 5.3445 per cent reached the day before, after weaker-than-forecast American jobs data reduced the odds of an imminent Federal Reserve rate hike.
Oil prices also fell as the energy market refocused on signs of recovering supplies from the Middle East and EU countries discussed releasing additional diesel stockpiles. US West Texas Intermediate crude futures dropped 3.7 per cent to $89.43 a barrel, while Brent crude fell 2.7 per cent to $99.45.
The pan-European STOXX 600 index rose 0.8 per cent on the day, though it remained on course for a weekly decline of about 1 per cent. The euro traded at $1.1248, its lowest since May 2025.
Sources: Channel News Asia (Reuters): Global shares gain, bonds supported as oil drops, jobs data misses expectations
The spread between the German and French 10-year sovereign bond yields pushed past 154 basis points, the widest since 2011, according to Reuters reporting cited by Channel News Asia. France's 10-year yield stood at 4.927 per cent, while the German 10-year yield — the eurozone benchmark — fell 12 basis points as investors preferred the relative safety of German debt.
"I wouldn't call it a crisis yet, but it looks like it has the potential to be one," said George Lagarias, chief economist at Forvis Mazars. "If it goes on for a couple more weeks then we'll be talking about a crisis in the bond market."
Relief elsewhere
The French underperformance came on a day when global markets otherwise found some relief. The benchmark US 10-year Treasury yield fell 6 basis points to 5.1717 per cent, down from a 24-year high of 5.3445 per cent reached the day before, after weaker-than-forecast American jobs data reduced the odds of an imminent Federal Reserve rate hike.
Oil prices also fell as the energy market refocused on signs of recovering supplies from the Middle East and EU countries discussed releasing additional diesel stockpiles. US West Texas Intermediate crude futures dropped 3.7 per cent to $89.43 a barrel, while Brent crude fell 2.7 per cent to $99.45.
The pan-European STOXX 600 index rose 0.8 per cent on the day, though it remained on course for a weekly decline of about 1 per cent. The euro traded at $1.1248, its lowest since May 2025.
Sources: Channel News Asia (Reuters): Global shares gain, bonds supported as oil drops, jobs data misses expectations
