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2026-09-21 17:32:11
[French 10-Year Bond Yield Falls Below 4.5% as Fiscal Concerns Intensify] ⑴ French 10-year bond yields fell below 4.5%, retreating from an 18-year high reached last week, as oil prices continued to decline, geopolitical tensions showed initial signs of easing, and regional supply strengthened. ⑵ Meanwhile, fiscal concerns intensified after Scope Ratings downgraded the country's rating from AA- to A+, citing rising debt, persistent deficits, and limited progress in structural reforms. Morningstar DBRS also revised its outlook on France's AA rating to negative. ⑶ These warnings come as France's budget deficit is projected to widen this year to 5.4% of GDP, up from 5.1% in 2025. ⑷ French bond spreads have widened significantly, with the premium of 10-year bonds over German bonds exceeding 100 basis points at one point, the first time in 14 years. ⑸ Political uncertainty ahead of next year's French presidential election further complicates the government's plans for fiscal consolidation in order to garner support.
