France’s Risk Premium Over Germany Closes at Highest Since 2012
- Spread has widened 32 basis points since snap vote was called
- Some investors say yield premium can widen to 100 basis points
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Investors are demanding the biggest premium in over a decade to hold French bonds compared to safer German debt, as concerns mount that parties vying to win France’s upcoming legislative elections may further bloat public finances.
The spread between the two nations’ 10-year bond yields rose three basis points to 80 basis points on Friday, the widest on a closing basis since 2012, when the euro area was in the depths of its debt crisis. Some investors say the gap could rise to 100 basis points.