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European bond yields rise amidst French political turmoil
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European bond yields rise amidst French political turmoil
Oct 7, 2025 1:42 AM

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.

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