French bonds fall amid unrest and fiscal pressure
French sovereign bonds declined as violent protests surged across the country in recent days, driven by rising living costs and pressure on the government, which faces significant debt and a high budget deficit, making it difficult to increase spending to contain the protests. This led to the gap between the 10-year French bond yields and their German counterparts widening to 146 basis points, the highest in two weeks, amid a decline in the euro and a 1.2% drop in the CAC 40 index. France is facing a complex social, economic, and financial crisis, while Parliament is debating the 2027 budget proposal that calls for austerity measures amounting to 43 billion euros, amid difficulties in reaching an agreement due to political divisions and preparations for the presidential elections.
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