Euro zone bond yields inch higher; Iran optimism wears thin
TLT•France and Spain sell debt at higher yields
On the supply front, France sold nearly €8 billion ($9.2 billion) in 10-year bonds on Thursday and, although demand held up well, the cost of borrowing spiked.
Unease over European governments' long-term financing, combined with volatile domestic politics, has undermined French bonds recently. OATs have been the poorest performers among the G7 debt markets in the last month.
At 2.909% on Thursday, 2-year OATs are yielding roughly 20 bps more than a month ago, compared with top-performing 2-year U.S. Treasuries, with a rise of around 9 bps, and a whisker ahead of the rise in German Schatz yields in that time.
Benchmark 10-year yields are nearly 18 bps higher than a month ago, compared with roughly 11 bps for UK gilts, the best-performing bonds in the last month.
France sold May 2036 paper at an average yield of 3.737% on Thursday, up from 3.68% at the July auction, as well as November 2036 bonds that achieved an average yield of 3.9%, up from 3.73% last month.
