LONDON, June 20 (Reuters) - Euro zone government bond
yields rose on Thursday with focus on a French bond auction that
will test demand ahead of a snap election on June 30 and as
investors awaited a string of central bank meetings on the edge
of the bloc, including in Britain.
Germany's 10-year bond yield, the benchmark for
the euro zone, rose 1.8 basis points to 2.42%.
Italy's 10-year yield was higher by 3.7 basis
points at 3.98%, and the gap between Italian and German Bunds
widened 1.4 basis points to 155 bps. It hit 159.3
bps last week, its highest since February.
The gap between France and Germany's 10-year yields
stood at 73 basis points (bps), steady on the day,
but below the seven-year high of 80 bps hit last week.
The spread has widened from under 50 bps since French
President Emmanuel Macron called a snap parliamentary election
to be held on June 30 and July 7 in response to a strong showing
for far-right parties in the European Parliament election.
"OATs (French government bonds) will face their next major
test today with medium term and linker auctions scheduled," said
Commerzbank analysts in a note.
They said France's debt office, the AFT, had announced a
"relatively modest volume" range of 8 to 10.5 billion euros in
contrast to the medium-term auction volume which had been closer
to 12 billion euros in recent months.
Investors are also watching central bank meetings, with the
Bank of England announcing its latest rate decision at 1100 GMT.