French bonds sold off after violent protests, pushing the gap with Germany towards a 14-year high

French government bonds and shares were hit by a fresh wave of selling on Monday, 19 October, after a weekend of violent protests in which public buildings were burned, hundreds of shops were looted and thousands of people were arrested, The Guardian reported.

The numbers

• The yield on France’s 10-year bond rose by as much as 16 basis points to 4.94%, close to a 24-year high.
• The spread between French and German 10-year yields, a gauge of the risk premium on French debt, moved towards its widest in 14 years.
• The 2-year yield rose 9 basis points to 3.64%, and the 30-year yield rose 10 basis points to 5.46%.
• The euro fell to a 17-month low against the pound and slipped 0.4% against the dollar to $1.1197 at one stage.
• The CAC 40 index fell 1.4%; Société Générale and BNP Paribas lost more than 3%. Italy’s FTSE MIB fell 1.6% and Spain’s Ibex 1.9%.

Why investors are worried

Analysts said the unrest would make it harder for the government to pass a 2027 budget that cuts pensions spending and ministry funding. France’s debt stood at 115.6% of GDP in 2025, with a budget deficit of 5.1%. Goldman Sachs said fiscal challenges, “especially in France”, look harder now than in 2011-15, although the risk of disorderly contagion appears lower. Deutsche Bank’s Jim Reid said the protests “won’t make it easy” for international investors to feel comfortable buying French bonds.

On Tuesday, French yields edged lower after their biggest one-day jump in about a month, and French cities were calm overnight under curfews, Reuters reported. Protest groups have announced a new round of demonstrations for Saturday. Insured losses from the riots were estimated at up to about €1.1 billion, The Guardian’s business live blog reported.