French government bonds came under intense selling pressure again early Thursday, October 22, 2026, taking the spread between 10-year French and German yields to its highest level since 2011, according to Dow Jones Newswires. The 10-year French OAT yield traded above 5 percent, hitting its highest since 2002 at 5.0601 percent.
The gap between France's 10-year OAT and Germany's benchmark Bund widened to 164 basis points, according to LSEG data cited by Dow Jones Newswires — the widest since the 2011 eurozone debt crisis. The 10-year German Bund yield declined to 3.407 percent as investors sought safe havens, underscoring how the selloff is concentrated on France.
The move marks a historic stress point for the eurozone's second-largest economy: the 10-year yield had already closed above 5 percent for the first time since 2002 on October 21, Market Flux reported. In a striking reversal of the old eurozone hierarchy, markets now demand higher yields to lend to France than to Italy or Greece. The French-German spread approached 160 basis points, a 15-year high, with contagion spreading to Italy, Belgium, Spain, and Greece.
The pressure reflects investors' escalating concern over France's combination of political instability and deteriorating public finances. France's public debt stands above 3.5 trillion euros and roughly 118 percent of GDP, the budget deficit remains among the widest in the eurozone, and weekend riots added to investor anxiety, according to Market Flux. France plans to issue a record amount of bonds in the coming year to fund the deficit and refinance pandemic-era debt — a task made sharply more expensive by rising yields.
Broader markets sent mixed signals: U.S. Treasury yields slid in early European trade amid falling equities, with the 10-year Treasury down 5.9 basis points to 5.088 percent, as concerns about economic growth and the sustainability of debt-funded artificial intelligence infrastructure investments outweighed inflation worries, Dow Jones Newswires reported. Analysts say German bonds could once again be sought as a safe haven if concerns over France intensify — and all eyes are on the European Central Bank's Governing Council meeting on October 29 for any response.