France's 10-year bond yield crosses 5% for first time in 24 years on fiscal and political concerns

What happened

U.S. Treasury yields were flat Wednesday, but French benchmark bond yields crossed 5% for the first time in 24 years as concern mounts about the country's fiscal and political woes, per WSJ's market coverage. Reuters reported the French 10-year OAT at 4.94% this morning — up 2.7bp — with the spread over German bunds at 153.1bp. Prime Minister Sebastien Lecornu said the government would reinforce police with a 'massive' troop deployment to quell protests planned for Saturday.

Who’s affected

• French government bonds (OATs): 10-year yield crossed 5%, a 24-year high
• French equities: fell this week as fiscal concerns mounted
• European sovereign debt broadly: rising French yields widen spreads vs German bunds; watch for contagion to Italian/Spanish debt
• Global rates backdrop: another data point of rising long-end yields worldwide (U.S. 10-year at 5.12%)

Sources

wsj.comreuters.com