French Yields Are Exceeding Italy’s in New Europe Bond Hierarchy

Lingering political risks have pushed French five-year bonds to the brink of becoming the highest-yielding in the euro region, and attention is now turning to how soon the rates on 10-year securities will do the same.

The yield on benchmark five-year securities this week closed above those on comparable Italian notes for the first time since 2005. It means French notes now offer the highest yield of any major euro area borrower in this tenor, and second only to Latvia across the whole bloc.