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2025-09-18 14:31:10
[Italian 10-year government bond yields fall below French 10-year bond yields for the first time] On Thursday, Italy's 10-year government bond yield fell below that of similar French bonds for the first time, reflecting investors' caution toward the country following the collapse of the French government and a relative increase in confidence in Italy. According to data from the London Stock Exchange Group (LSEG), the yield spread between the two countries' government bonds narrowed to zero for the first time. The spread has narrowed from around 50 basis points in April, and was as high as 200 basis points during the 2020 COVID-19 crisis. This marks a historic shift in investor sentiment toward the two countries: France has traditionally been seen as one of the safest borrowers in the eurozone, while Italy's fiscal problems seriously threatened the stability of the eurozone during the 2012 sovereign debt crisis. France's 10-year government bond yield has continued to climb for months as concerns about the sustainability of public finances and the economic downturn have weakened investors' appetite for French debt. At the same time, Italy's political stability and a credible debt reduction path recognized by investors have allowed its government bond spread to continue to benefit from rising risk assets and the European Central Bank's loose monetary policy since the end of 2023.
