France’s 10-year yield tops 4.8% ahead of budget vote

France’s 10-year government bond yield rose to between 4.86 per cent and 4.89 per cent on Monday, depending on the report, after a weekend of rioting, one day before the National Assembly votes on the first part of the 2027 budget.

Updated Oct. 19, 2026. Germany’s 10-year yield was flat at 3.41 per cent, according to Time News, leaving the French premium over Germany at about 1.45 percentage points. CNBC reported that the gap is the widest since the early 2010s euro-area debt crisis and that French yields now exceed those of Italy and Greece.

Prime Minister Sébastien Lecornu’s minority government is seeking a fiscal effort of 54 billion euros ($61 billion), including 43 billion euros in new measures, to cut a deficit of 5.4 per cent of gross domestic product. Two of his predecessors have been toppled in earlier budget fights. A no-confidence motion is considered unlikely without the far-right Rassemblement National and the Socialists acting together, according to an ING note dated Oct. 1 cited by Traders Agency.

The sell-off follows the worst unrest in France in years. The interior ministry said nearly 2,400 people had been arrested by Sunday, and police used tear gas in Paris, Bordeaux, Nice and Marseille, Time News reported. A fire destroyed much of the historic town hall in Limoges. About 1,000 officers were injured on Saturday, seven seriously, the ministry said, according to an aggregation by NewsCord. Arrest counts have varied by outlet and by time of day, and Canada News Media’s earlier report carried a lower figure of 1,800.

In a televised address on Sunday night, President Emmanuel Macron said: “Nothing justifies it, nothing explains it, nothing excuses it.” He did not declare a state of emergency or a curfew, ordered a review of possible intelligence or policing failures and promised “concrete proposals” this week. The Élysée Palace said he refused Interior Minister Laurent Nuñez’s resignation.

The debt numbers behind the market reaction are large. Amélie de Montchalin, First President of the Court of Auditors, warned that accumulated debt is approaching 3.6 trillion euros, nearly 119 per cent of GDP. Philippe Juvin, the Assembly’s general rapporteur, told deputies on Oct. 13 that the cost of insuring French debt against default had doubled in a month and that debt-servicing costs in 2027 would exceed 91 billion euros, against 64 billion for education, according to Traders Agency’s reading of the session record. CNBC reported that foreign investors hold nearly 60 per cent of French government debt, up from about 48 per cent at the start of 2022.

Analysts were split on how worried to be. Mike Bell of RBC BlueBay said: “It looks like either the bond markets riot, or the people riot, or both.” Ken Egan of KBRA said recent auctions showed “still very solid underlying demand for French debt.” Sharon Bell of Goldman Sachs said she did not see conditions that would call for emergency action by the European Central Bank, which could use its Transmission Protection Instrument if spreads disrupt market liquidity. Elias Hilmer of Capital Economics warned the French-German spread could widen to 200 basis points by the end of 2027.

Politicians used the unrest to attack the government. Marine Le Pen said it was “running on fumes, exhausted and disoriented.” Jean-Luc Mélenchon warned of “events that will eventually become uncontrollable.” Le Pen, who leads polls for the 2027 presidential race according to CNBC, has said she would end French aid to Ukraine after six months, as Canada News Media reported Oct. 17.

For Canadians, France’s trouble matters for travel and for markets. The Government of Canada’s travel advisory for France, updated Oct. 13, tells travellers to exercise a high degree of caution because of terrorism and warns that even peaceful demonstrations can turn violent and that strikes can disrupt transport. Canadians in France are advised to avoid demonstrations and follow local authorities’ instructions.

The Assembly vote is due Tuesday, Oct. 20. Students began a half-term break on Monday, and new mass demonstrations are planned for Nov. 5. The government’s stated goal is to bring the deficit back to 3 per cent of GDP by 2029, a target Banque de France Governor Emmanuel Moulin has called “possible to get back to.” Several of the figures above come from secondary summaries of CNBC, Guardian and Reuters reporting and could change as markets move.

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Via CNBC, The Guardian, Reuters, Time News and Traders Agency.