France’s 30-year government bond yields hit their highest levels in over 16 years on Tuesday, driven by fiscal concerns, as Prime Minister Francois Bayrou launched talks with political parties in a bid to prevent a government collapse.
France’s far-right National Rally said on Monday it was preparing for snap elections, anticipating that opposition parties would bring down the minority government in a vote scheduled for Sept. 8.
France’s 30-year government bond yields reached their highest level since June 2009, at 4.513%, up 6.5 basis points (bps).
Long-dated government bond yields have come under selling pressure as markets expect Germany’s investment plans, along with likely increases in defense spending across euro area countries, to push up debt levels.
Germany's 10-year bond yield, the benchmark for the eurozone, rose four basis points to 2.79%. Yields on 30-year German bonds reached a fresh 14-year high at 3.41%.
Britain's 30-year gilt yield hit its highest since 1998.
Spain’s 30-year yields were up five bps at 4.29%, after hitting 4.297%, its highest since November 2023. Italy’s 30-year yields reached their highest since April at 4.661%.
