France's Borrowing Costs Surpass Spain for First Time Since 2008

France's borrowing costs briefly rose above Spain's, highlighting concerns about the new French government's budget deficit. This shift, seen for the first time since 2008, occurred after weak economic data and revised European Central Bank rate cut expectations. The move reflects uncertainty in France's fiscal policy and business activity.

France's borrowing costs briefly surpassed Spain's for the first time since 2008 on Tuesday, reflecting investor concerns over the new French government's ability to manage its budget deficit, LSEG data revealed.

Euro zone bond yields saw a seesaw movement, initially rising before sliding into negative territory. This volatility was further compounded after a surprising dip in U.S. consumer confidence data for September.

Rising concerns were evident as Spanish and French bond yields traded closely around 2.98%, reflecting market reactions to France's uncertain fiscal policies and disappointing business activity data. The situation worsened as France's newly appointed finance minister, Antoine Armand, acknowledged the severity of the deficit, predicting it could hit 6% this year, significantly exceeding the EU's 3% limit.

(With inputs from agencies.)