French Yields are exploding
Published · Updated
UpdateMonday, October 19, 2026 at 2:13 PM ET
French 10-year yields stand at 4.94% on Monday, putting the move on track for the biggest one-day rise since March 2025. The spread over German Bunds has widened to 146 basis points, the widest in two weeks, and the yield is closing back in on the 4.989% peak hit on October 2. On October 9, deputies voted 31 to 3 to reject the revenue section of the social security budget, sending the text back to the government. French inflation ran at 3.1% in September, above forecasts, while the Bank of France puts third-quarter growth at just 0.1%. Euro zone officials say the market stress has stayed contained to French assets, with haven demand showing up in gold rather than spilling into US equities o
French 10-year yields are up almost 10 bps today and have reached the highest level since 2002.
That puts France in a bind. Higher yields push up borrowing costs for mortgages and loans, which makes credit harder for young people to get and adds to the squeeze on households. At the same time, the bond market is pressuring the government to cut public spending, which hits the same households from the other side. Both feed public anger.
Meanwhile polls point in an unexpected direction: OpinionWay has Mélenchon, who backs the protests but not the violence, at 49% among 18 to 24 year olds against 28% for Le Pen. That does not suggest the protests are pushing the country toward the right in the longer run.
Mélenchon’s runs on taxing the rich and corporations hard, spend more on public services, and ease the debt burden by having the ECB cancel or freeze the debt it holds, instead of cutting.
That could deepen the dilemma: the voters hurt most by high yields are backing the candidate whose debt plan the bond market is least likely to trust.
© Raydn · raydn.us