France's credit slides from "core" to "periphery": Is a new round of the European debt crisis making a comeback?

Amid large-scale demonstrations that escalated into riots and stalled budget negotiations, French government bonds suffered a new round of selling last week: the 10-year bond yield briefly rose to 5.14% on Thursday, breaking through the 5% mark and hitting its highest level since 2002; the France-Germany spread also widened to its highest level since 2011. On Friday evening, rating agency Moody's unexpectedly affirmed France's sovereign credit rating, easing market sentiment. On Monday, the French 10-year bond yield fell by about 13 basis points to 4.91%, and the France-Germany spread narrowed to about 153 basis points.