French sovereign yields rose on Monday and spreads to German bunds widened after
weekend unrest, compounding existing growth weakness and rising debt worries.
LSEG data showed France's 2-year bond yield jumped as much as 10bps intraday.
France's 10-year yield had earlier surged to 4.99% in early October amid
borrowing concerns, though volatility eased last week. Deutsche Bank global
macro head Jim Reid said the unrest will make international investors reluctant
to fully buy French bonds and could test the recent narrowing in France's
spreads ahead of an approaching election. Traders are watching for spillover to
other high-debt eurozone issuers, notably Italy.
