French government bond risk indicators hover at high levels, yield premium over German bonds once exceeded 150 basis points.

A gauge of French bond risk broke through a key level on Tuesday. The yield premium on 10-year French government bonds over German bunds of the same maturity surpassed 150 basis points to reach 154 basis points, the widest since October 2. Earlier this month, as political and fiscal pressures intensified, the spread had reached 159 basis points at one point, prompting many investors to liquidate their French government bond positions.