Euro-Area Bond Risk Premiums Surge on France Concerns - FJElite
- Risk premiums across euro-area government bonds jumped on Thursday, signaling that concerns over France’s fiscal and political situation are beginning to spread into other markets.
- The spread between Italian and German two-year yields nearly doubled to 55bps on Thursday, marking the largest daily increase since 2020 on a closing basis. The equivalent French spread widened by as much as 22bps, the biggest move since 2012.
- The moves came as German bonds rallied sharply, with investors seeking the region’s safest assets. Growing market nervousness suggests the selloff in French assets is beginning to weigh more broadly on risk appetite.