French 5-year CDS climbs to 45 basis points, highest since March 2020
The credit-default swap gauge reaches its highest level since March 2020, according to LSEG data.
Published
France's five-year credit default swaps are at 45 basis points, the highest level since March 2020, according to LSEG data.
The move follows a string of warning signs on French debt. Scope downgraded France's credit rating to A+ from AA- on Friday. On the same day, French 10-year yields hit their highest level since 2008, climbing 11 basis points to 4.56%, according to LSEG data, and the yield premium over German bunds widened to 100 basis points. France's 2027 budget draft projects debt reaching 121.7% of GDP despite a planned spending cut.
The rise in five-year CDS shows the stress is no longer confined to long-dated debt. A 45 basis point level points to real concern about the government's ability to service its obligations over the medium term, given the downgrade, the debt trajectory and the deficit outlook. Equity markets holding steady today does not offset that structural pressure.