Euro zone bond yields diverge in volatile trading
TLT•French and Italian bond yields rose while German and Dutch yields fell in volatile trading. The French-German 10-year yield gap reached around 140 basis points, its highest since May 2012.
1. Yields diverge
Yields initially spiked across euro zone government bonds before retreating, then moved in opposite directions: French and Italian yields rose while German and Dutch yields fell. Germany’s 2-year yield was down almost 14 basis points to 3.05%, while Italy’s was up more than 9 basis points to 3.63%; French 2-year yields rose nearly 7 basis points to 3.694%.
2. France in focus
French 10-year yields rose nearly 7 basis points to 4.93%, and the gap between French and German government bond yields was around 140 basis points, its highest since May 2012. France presented its 2027 budget bill, seeking belt-tightening measures to lower its deficit. The government is set to sell a record amount of bonds to investors next year.
