French 10-year bond yields hit 5% for first time since 2002, widening gap with Germany

French 10-year bond yields rose to the 5% range on October 21, the highest level since July 2002, trading about 0.12% higher than the previous day. This marks the first time in roughly 24 years that yields have reached this threshold. The increase reflects strong concerns over France's long-term fiscal sustainability, compounded by expectations of difficult budget negotiations and social unrest from protests across the country. The yield spread over German bunds widened to the upper 1.5% range, with one trader noting little reason for optimism. German 10-year yields also rose to the mid-3.4% range, while UK yields edged up to the upper 5.3% range following September's consumer price index rise of 3.5%, which exceeded market forecasts and fueled expectations of a Bank of England rate hike.