The yield spread between French and German 10-year government bonds has widened to 80 basis points.

The yield premium of French benchmark bonds over German yields has risen to 80 basis points for the first time since April, indicating growing concerns among investors about the political outlook in France. On Wednesday, the borrowing cost for French 10-year government bonds rose by 3 basis points to 3.53%, further widening the spread with German bonds of the same maturity. Two weeks ago, the yield spread between the two countries' bonds was only 65 basis points. French Prime Minister Franois Beru will initiate a vote of confidence on September 8, attempting to force all political parties to declare their stance on his budget plan. Since this decision was announced, the French market has remained a focus. Guillaume Rigeade, co-head of fixed income at Carmignac, stated that if the political crisis in the country escalates, the yield on their 10-year government bonds and the spread with German bonds could soar to 100 basis points for the first time since 2012.