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[French Bond Market Pressure Spills Out, Global Bond Market Shows Three-Tier Divergence] ⑴ The French bond market has recently experienced a sharp sell-off. The core reason is that the market had previously bet that highly indebted France would significantly benefit from falling oil prices. Following the signing of the memorandum of understanding between the US and Iran in June, French government debt saw its largest inflow of foreign capital that month, and this position is now being rapidly unwound. ⑵ This unwinding of positions will not continue indefinitely, but the process could cause significant damage and has already spread to other highly indebted Eurozone countries. It may worsen further before the European Central Bank intervenes. ⑶ The global bond market is currently exhibiting three phenomena: first, contagion to highly indebted Eurozone countries such as Italy and Spain; second, safe-haven flows to the US; and third, low-debt safe-haven countries such as Germany, Sweden, and Switzerland continuing their outperformance trend this year. ⑷ Looking at 10-year government bond yields, French yields have surged significantly, while other countries can be roughly divided into three categories. ⑸ The most affected countries are mainly Italy, with Spain also appearing vulnerable, its yields rising above average levels as the situation in France escalated. (6) The main safe-haven inflows are to the United States, with Japan also benefiting from the unwinding of yen carry trades. These countries' fiscal policies are not favored by the market, yet they attract safe-haven capital inflows. (7) Safe-haven countries include low-debt nations such as Germany, Sweden, and Switzerland. Canada and Australia also exhibit similar characteristics, with their yields consistently below average. (8) The most obvious factor halting the French debt sell-off may be the decline in oil prices, which the United States could achieve by increasing its efforts to prevent the activities of armed vessels in the Strait. (9) However, the impact of the current global debt crisis extends beyond France itself. Japan and the United States have both previously experienced debt problems, and highly indebted governments often attempt to artificially suppress yields. Therefore, debt devaluation trading possesses a structurally sound bullish logic.