BondsMedium•2 October 2026•
1 min read
French 2027 Budget Sparks Bond Market Turmoil as Yield Spreads Hit Post-Crisis Highs
Key Facts
1The French government presented its 2027 budget bill aiming to reduce the deficit to 5% of GDP.
2The spread between French and German 10Y yields rose to a new post-euro crisis high following the announcement.
The French government presented its 2027 budget bill aiming to reduce the national deficit to 5% of GDP. ActionForex reported that the announcement caused the spread between French and German 10-year yields to rise to a new post-euro crisis high as markets reacted to the fiscal plans.
The budget proposal triggered concerns over fiscal sustainability and the feasibility of reaching deficit targets, leading to a sell-off in French sovereign debt. This market uncertainty comes amid broader economic shifts, with Michigan Consumer Sentiment recorded at 48.1 on September 25, 2026, and U.S. JOLTs job openings falling to 7.079 million on September 29, 2026.