France Bond Risk Hits Nine-Month High Amid Fears Over Government

The premium on French debt over safer German peers rose to a nine-month high after President Emmanuel Macron’s new continuity cabinet sparked concerns for viability of the new government.

The yield on 10-year notes rose as much as seven basis points to 3.58%, lifting the premium investors demand to hold French debt to over 84 basis points, the most since January. The spread rose to 90 basis points late last year, the highest since 2012. Meanwhile the euro fell, lagging all its Group-of-10 peers with the exception of the Japanese yen.