LONDON, Oct 7 (Reuters) - Euro zone bond yields rose on
Tuesday, a day after French Prime Minister Sébastien Lecornu
unexpectedly resigned, deepening a political crisis in Europe's
second-biggest economy.
French President Emmanuel Macron on Monday tasked his outgoing
prime minister, who quit earlier in the day, to hold last-ditch
talks with other political parties to try to chart a path out of
the crisis.
Lecornu tendered his government's resignation only hours
after announcing his cabinet line-up, making it the
shortest-lived administration in modern French history.
The German 10-year bond yield, the benchmark for
the euro zone bloc, rose 1.4 basis points to 2.73%.
The French 10-year yield was up 2.7 bps at
3.599%.
This left the yield gap between safe-haven Bunds and 10-year
French government bonds - a market gauge of the
risk premium investors demand to hold French debt - at 83 bps.
The spread on Monday hit 87.96 bps, its highest since January
13.
Meanwhile, Japanese government bond yields retreated from record
highs after a closely watched sale of 30-year debt passed
smoothly, despite concerns that the country's likely next prime
minister will loosen fiscal restraints.
Following the surge in Japan's 30-year borrowing costs,
ultra-long bonds across Europe also came under pressure.
The 30-year German bond yield rose 2.4 bps at
3.32%. The French 30-year yield was up 3.2 bps at
4.43%. Italy's 30-year yield was up 3.7 bps at
4.51%.
On the data front, German industrial orders fell for a fourth
straight month in August, dragged lower mainly by a weak car
industry and a decline in overseas demand, the federal
statistics office said on Tuesday.