French bond spreads are blowing out anew on Tuesday, with that country’s 10-year OAT yield rising 3.4 basis points to 4.956% and the German 10-year Bund yield sliding 3 basis points to 3.43%.
This brings the spread between the two core EMU members back to about a cycle high of 153 basis points, the widest level since the continent’s debt crisis in 2011.
ECB member Olli Rehn, testifying Tuesday in Finland’s parliament, conceded that French bond spreads have widened “somewhat.”
“All euro-area countries must bring their public deficits under control and thereby ensure their debt sustainability,” said Rehn. “This goes just as much for France as it does for Finland.”
France’s CAC 40 is leading European stocks lower, down 0.8% today, and off about 12% since peaking two months ago.
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