French 10-Year Yields Briefly Overtake Italy’s After PM Quits Before Ending Day in Line

A short-lived repricing tied to Sébastien Lecornu’s exit left 10-year rates near parity by the close, with shorter tenors still signaling higher perceived French risk.

Overview

French 10-year OATs touched 3.59% versus 3.58% for Italy’s BTPs, briefly making France look riskier than Italy on the benchmark maturity.
The OAT–Bund gap widened to about 87 basis points as Paris stocks fell, with French banks under pressure: Société Générale -4.2%, Crédit Agricole -3.4%, BNP Paribas -3.2%.
By the end of trading the 10-year yields largely realigned near 3.57% and spreads versus Bunds settled around 85 basis points.
Investors kept pricing greater near-term risk for France on 2- and 5-year debt, underscoring the persistence of short-dated stress.
The move followed Lecornu’s resignation after 27 days and growing calls for censure, presidential resignation or dissolution, while Italy’s standing has been buoyed by recent rating upgrades and fiscal consolidation efforts.