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13h ago

French 30-Year Yield Tops 4.50% for First Time Since 2011 on Confidence Vote Concerns

Investors cite the Sept. 8 confidence vote as a test of France’s ability to enforce fiscal discipline.

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Vers 10h10, ce taux, considéré comme le baromètre de la confiance des investisseurs à long terme, atteignait 4,50%, contre 4,45% la veille en clôture.

Overview

  • Market participants link the jump in long-dated borrowing costs to political uncertainty before Prime Minister François Bayrou’s confidence vote in the Assemblée nationale.
  • The 10-year benchmark yield climbed to about 3.57% as selling extended along the curve.
  • Bond manager Aurélien Buffault described the 30-year move as a very negative sign of investor distrust toward France.
  • Deutsche Bank’s Jim Reid said fears of political paralysis could make budget tightening more difficult given the current deficit.
  • Spillovers were visible across Europe, with German 30-year yields near euro crisis-era highs and the UK’s 30-year at 5.69%, the highest since 1998.