France's 10-year yield hit 5.14% and its spread over German Bunds reached 177.7 basis points, the widest since 2011, as the composite PMI fell to 48.4. The squeeze lands days before the ECB's 29 October meeting and a Moody's verdict.
Anaïs Howland notes the OAT-Bund 10-year spread closed at 171bp, the widest since 2011, while the two-year gap over Germany jumped from 47bp to 78bp in a week as France's deficit fight spilled into the front end. Source
France is doing part of the European Central Bank's tightening for it. The 10-year OAT, France's benchmark government bond, touched 5.14% on Thursday, the highest since July 2002, and the spread over Bunds reached 177.7 basis points, the widest since November 2011, Reuters reported. French five-year credit default swaps (CDS) rose above 100 basis points for the first time since October 2012. A day later the French flash composite PMI came in at 48.4, against a forecast of 50.5 and a previous 51.1. The ECB meets on 29 October.
