France weighs more short-term debt sales as bond stress persists
The French 10-year yield rises 15 basis points to 4.8974% on Wednesday as Paris looks to lean more on shorter maturities.
Published
France is considering issuing more short-term debt as its bond market remains under pressure. The French 10-year yield rises 15 basis points on Wednesday to 4.8974%.
The move follows a sharp swing in recent sessions. On Tuesday the 10-year yield fell 16 basis points and the spread over German debt narrowed 12 basis points. Earlier this month the yield had climbed as high as 4.989%, its highest level since 2002, and the premium over Germany widened to 159 basis points.
A euro zone official said the rise in French yields reflects domestic developments and shows no sign of spreading to other euro-area debt markets. German two-year yields ease to 3.02% on Wednesday even as French and Italian yields rise, extending a split that has held since mid-September.
Shifting more of France's borrowing toward shorter maturities would let Paris fund itself at lower yields than the climb seen on the 10-year, but it also bunches repayment needs closer together, the same concern that drove the cost of insuring French debt against default to its highest since March 2020. It does not touch the underlying deficit math, which the European Central Bank's Christine Lagarde has called serious and without a clear path lower. For now the move reads as a way to manage the near-term funding calendar rather than the deeper fiscal problem, and the stress it is meant to ease has so far stayed confined to French assets, without spilling into US Treasurys.