France's Risk Premium Hits 15-Year High

France's risk premium has risen to 151.8 basis points, its highest level in 15 years, surpassing Italy, Spain, Greece, and Portugal due to unrest and political instability. The premium, measuring the 10-year bond yield gap versus Germany, climbed amid weekend riots that prompted overnight curfews in Paris and other cities, alongside political deadlock over the 2027 state budget. French 10-year yields rose to 4.940%, while Italy's premium stood near 115 basis points, followed by Greece at 97.9, Spain at 63.5, and Portugal at 49.1. Germany's 10-year yields fell to 3.428%. Schroders managers noted France's high public deficit and fragmented parliament hinder credible fiscal consolidation, making the sovereign premium sensitive to budgets and elections. France's all-time high was 445 basis points on October 19, 1987.