Italy's bond risk premium tops 100 basis points, France's climbs to 124
Italy's spread over German debt passes the 100 basis point mark for the first time since March as France's premium extends its own climb.
Published
Italy's 10-year bond yield premium over Germany has risen above 100 basis points for the first time since March. France's equivalent spread has climbed 5 basis points to 124 basis points, a level not seen since 2012.
France's spread first crossed 100 basis points in mid-September, briefly stabilising near that mark around September 18, the same day its 10-year yield touched highs last seen in 2008. Since then Scope has downgraded France's credit rating and the cost of insuring French debt against default, measured by 5-year credit default swaps, has been widening.
Italy's move above 100 basis points adds a second major eurozone sovereign to that stress picture. It comes as Italy's finance minister has warned that the country's debt is rising quickly.
Neither country's widening spread has shown a consistent link to US Treasury yields through this stretch, and there is no sign of that changing today. For investors, the moves look like a continuation of fiscal strain that has been building for weeks rather than a fresh shock, with Italy now following France into territory that puts both governments' borrowing costs under closer scrutiny.