German income drops as French debt increases
German 10-year government bond yields fell to 3.31%, their lowest level in nearly two months, as investors flocked to safe-haven assets amid turmoil in France and increasing risk aversion. In contrast, borrowing costs in France rose, with the yields on 10-year French bonds increasing by 22 basis points this week, surpassing 5.00%. This caused the spread between French and German bonds to widen to its highest level in years, nearing 160 basis points, reflecting deteriorating investor sentiment regarding French sovereign risks.
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