French Debt Concerns Raise Investor Anxiety Amid Political Turmoil

Investor concerns over French finances rose as the premium to hold French debt hit its highest level since 2012. This comes amidst political unrest from far-right leader Marine Le Pen's moves to topple the government. Meanwhile, euro zone bond yields, including those in the U.S., experienced a decline.

Investor anxiety over French finances intensified as the premium on French debt surged to its highest since 2012 on Wednesday. The spread between French and German 10-year bond yields rose to 90 basis points, later easing to 86 bps. In contrast, benchmark German and U.S. yields fell.

The political landscape in France remains volatile with far-right leader Marine Le Pen threatening a no-confidence vote against France's coalition government over the proposed 2025 budget. French Prime Minister Michel Barnier has warned of potential market turbulence should the government fall.

Despite stable yields on France's 10-year bonds at 3.021%, European bond yields are largely down, troubled by weak consumer confidence and growth indicators, particularly from Germany and France. ECB board member Isabel Schnabel's comments on gradual interest rate cuts have also influenced market dynamics.

(With inputs from agencies.)