French Bond Risk Hits Two-Week Low on Le Pen’s Budget Remarks
- Spread on 10-year notes falls to lowest in two weeks at 77bps
- Investors had been bracing for months of wrangling over budget
A measure of France’s bond risk fell amid hopes lawmakers will strike a deal on next year’s budget sooner than many investors had expected, ending months of political impasse that has weighed on markets.
The extra yield investors demand to hold 10-year French notes over safer German peers dropped as much as seven basis points to 77 basis points, the lowest in two weeks. The move was compounded by losses in German bonds as demand for haven assets waned, as well as low trading volumes.