French bond yields rise and Paris shares fall after a weekend of riots
France's 10-year borrowing cost rose about 8 basis points on Monday and the CAC 40 fell more than 1% as investors weighed the weekend's violent cost-of-living protests and the 2027 budget, MarketWatch and AFP reported.
France’s borrowing costs rose and Paris-listed shares fell on Monday after a weekend of violent cost-of-living protests across the country, according to market reports.
The yield on France’s 10-year government bond (OAT) was up 7.8 basis points at 4.866%, while Germany’s 10-year Bund yield rose 1 basis point to 3.420%, MarketWatch reported at 8:59am GMT, citing Tradeweb. The gap between the two reached 145 basis points, a two-week high, according to LSEG data. AFP put the spread at 144 points earlier in the session, up from about 137 on Friday.
The CAC 40 was down 1.23% at 7,858.64 points at about 7:40am GMT, AFP reported, with Société Générale, Crédit Agricole and BNP Paribas each down more than 2%. The euro was 0.28% lower against the US dollar, CNBC reported.
“What started as student/education unease about a month ago morphed into broad protest against the rising cost of living, declining public services and overall frustration against the Macron administration,” KBC Bank analysts wrote, according to The Wall Street Journal. Mike Bell of RBC BlueBay Asset Management told CNBC: “It looks like either the bond markets riot, or the people riot, or both.” Ken Egan of ratings agency KBRA told CNBC that auctions last week showed “still very solid underlying demand for French debt”.
French lawmakers vote on Tuesday on the revenue part of the 2027 budget, which includes €43 billion of measures to improve public finances, AFP reported. Moody’s is due to review France’s credit rating on Friday 23 October, La Tribune reported.
For the latest on the protests, see our earlier report.
Sources
- French Government-Bond Yields Rise on Protests, Budget Concerns; Treasury Yields Fall -- Update · MarketWatch (Dow Jones)
- Bourse de Paris: la dette française sous tension après les violences du week-end · AFP, via Bourse Direct
- French unrest compounds debt crisis fears. Paris-listed stocks, bonds and the euro fall · CNBC
- French Bond Yields Rise Sharply, German Yields Edge Lower · The Wall Street Journal
- France hit by debt sell-off as protests unnerve investors · The Guardian
- Note de la France : Moody's met le budget 2027 sous surveillance avant le 23 octobre · La Tribune
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