French bond yields climb as protests pressure government finances

Euro zone bond yields rose Wednesday, led by French borrowing costs, as investors weighed widespread protests in France pressuring a government struggling with finances. A rebound in oil prices above $110 a barrel added to negative sentiment. French 10-year OAT yields rose 3 basis points to 4.948%, nearing 5% for the first time since 2002, with weekly gains exceeding 16 bps. The French-German yield spread widened to 150 bps, reflecting investor demand for extra return on French debt. Protests have calmed but more are planned Saturday, with Carrefour cutting profit targets due to riots. Italy also saw anti-rioting measures approved after Milan protests, though Italian yields rose only half as much as France's this week.