French bonds and stocks slide as violent protests rattle investors
French government bonds and stocks fell Monday after violent weekend protests, the Guardian and CNBC reported. The 10-year bond yield rose as much as 16 basis points to 4.94%, the Guardian reported. Investors worry the unrest will make it harder for France to cut its deficit.
French government bonds and stocks sold off on Monday after violent protests over the weekend led to thousands of arrests and burned buildings across France, the Guardian and CNBC reported.
The yield on France's 10-year government bond rose as much as 16 basis points to 4.94%, pushing borrowing costs close to a 24-year high, the Guardian reported. CNBC reported that the 10-year yield jumped more than 10 basis points. Yields rise when bond prices fall, the Guardian reported.
The gap between French and German borrowing costs, a measure of the risk investors see in French debt, moved toward its highest level in 14 years, the Guardian reported. CNBC reported that the spread hit its highest level since the European debt crisis of the early 2010s, and that French yields now top those of Italy and Greece.
Paris's CAC 40 stock index fell 1.4%, the Guardian reported, while CNBC reported it was down 1.7% in afternoon trading. The euro fell to a 17-month low against the British pound, the Guardian reported.
Hundreds of thousands of people marched over the weekend over political paralysis, the cost of living and public services, CNBC reported. Some gatherings turned violent, with buildings and cars set on fire and more than 2,000 arrests, CNBC reported. French President Emmanuel Macron condemned the "unbridled violence" in a televised address Sunday night, the Guardian reported.
Investors are watching whether Prime Minister Sébastien Lecornu's minority government can pass the 2027 budget and lay out a credible plan to cut the deficit, CNBC reported. France's debt stood at 115.6% of economic output in 2025, with a budget deficit of 5.1%, the Guardian reported.
"If you're an international investor thinking about whether you want to invest in French bonds, it's not helpful," said Mike Bell of RBC BlueBay Asset Management, CNBC reported. Neil Wilson of Saxo UK said the unrest "underscores how hard it will be for a government to enact the kind of spending restraint required to get the deficit down," the Guardian reported.
What we know: French bond yields and the risk premium on French debt rose sharply Monday as stocks and the euro fell.
What we don't: Whether the government can pass its 2027 budget amid the unrest.
Where outlets agree The Guardian and CNBC report that French bonds, stocks and the euro fell Monday as violent weekend protests added to worries about France's finances.
Where they differ The Guardian reports the 10-year yield rose as much as 16 basis points and the CAC 40 fell 1.4%, while CNBC reports a rise of more than 10 basis points and a 1.7% drop in afternoon trading.