France-Germany Yield Spread Widens as French Growth Trails Peers

The extra yield investors demand to hold France’s 10-year debt over similar-maturity German bonds increased for a third day on signs the French recovery is trailing its regional peers.

France’s five-year notes yielded the most relative to equivalent-maturity German debt in more than a week after the nation sold 7.9 billion euros ($10.8 billion) of debt due between 2016 and 2019, and inflation-linked securities. Moody’s Investors Service is due to give an update of its sovereign ratings for France tomorrow. German 10-year yields fell to a seven-week low as a survey showed Chinese manufacturing unexpectedly contracted. Portuguese and Irish bonds declined.