France’s Bonds Decline With Spain’s After S&P Ratings Downgrade
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France’s government bonds declined after Standard & Poor’s lowered the country’s sovereign-credit rating by one level.
Spanish bonds dropped following a rally yesterday when the European Central Bank unexpectedly cut its key interest rate to counter a risk of deflation. S&P downgraded France to AA from AA+ with a stable outlook saying the government’s reform of tax, labor markets, products and services won’t raise medium-term growth prospects. The cost of insuring French debt against default fell to the least in more than three years. Benchmark German bunds were little changed.