French Bonds Hit 200-Year Low as Yield Spread Over Germany Widens

Key Facts

1French 10-year government bonds have posted their worst rolling decade of nominal returns since 1803.

2Marine Le Pen proposed a shadow budget aiming to cut the deficit to 3.7% of GDP next year.

3The France-Germany 10-year yield spread widened by 8 basis points to 135 basis points.

French 10-year government bonds have posted their worst rolling decade of nominal returns since 1803. Deutsche Bank reported that the spread between French and German 10-year bond yields widened by 8 basis points to reach 135 basis points. These developments follow a shadow budget proposal from Marine Le Pen aiming to cut the national deficit to 3.7% of GDP next year.

DB closed at $33.55 on October 7, 2026, as the market reacted to a French budget deficit forecast of 5.4%, significantly above the European Union's 3% ceiling. Analysts at UBS noted that bond market pressure is increasingly pushing both the government and political opposition toward fiscal discipline to mitigate future sovereign risk.