French markets tumble after worst unrest in years
TLT•French 10-year yields rose 12 basis points to 4.90% as French stocks fell 1.5% and the euro weakened after widespread protests. The spread over German 10-year yields reached 146 basis points.
1. Bonds and stocks fall
French bond prices fell on Monday, lifting the 10-year yield 12 basis points to 4.90%. The yield gap over Germany widened to 146 basis points, its highest in two weeks. France's CAC 40 dropped 1.5%, while broad European stocks fell 0.6%.
2. Protests heighten concerns
Widespread weekend protests, during which thousands of people were arrested and shops were looted or damaged, underscored the difficulty of passing a budget to rein in France's deficit. BNP Paribas and Societe Generale each fell 3%, and the euro declined 0.2% to 0.3% against the dollar, pound and yen. France's five-year credit default swap rose 5 basis points to 81 basis points.
