Rate on 10-year French bonds creeps upwards

23rd April 2012, Comments 0 comments

The rate on 10-year French bonds edged higher as trading of debt began on Monday, signalling some market jitters following the first round of the presidential elections.

In early trading, the yield, or interest rate on 10-year debt reached 3.098 percent, compared with 3.081 percent late on Friday.

The difference, or spread, with benchmark German 10-year bonds widened slightly to 1.43 percentage points as the Bund's rate edged lower.

The second-round vote on May 6 will be contested by Socialist front-runner Francois Hollande and incumbent President Nicolas Sarkozy, as expected.

It will be held against a background of market concern over the ability of Italy and Spain to pay down their sovereign debt.

Hollande has said he will re-negotiate terms of a pact that bound eurozone governments to reducing deficits and debt.

That would put him at odds with the biggest eurozone economy, Germany, which stresses the need for fiscal discipline to resolve the debt crisis.

A fundamental difference of opinion between Germany and France, the second biggest eurozone economy, would likely increase tension on financial markets.

© 2012 AFP

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