French bond sell-off ‘reminiscent of the euro crisis’ as Paris proposes cuts and tax rises – business live

AI desk brief

French sovereign stress is driving eurozone bond yields higher, with the Franco-German 10-year spread at +13.9bps in its biggest daily jump since March 2020 and French 10-year OATs at their highest since 2002 before easing. That matters for precious metals because the move points to firmer nominal yields and potentially tighter real-rate conditions, both typically negative for gold and silver if sustained.

Paris proposed €43bn of cuts and tax rises, but analysts say the budget still leaves the deficit around 5% of GDP next year and does not stabilize debt, keeping French bonds under pressure and ECB intervention thresholds high. Near-term catalysts are eurozone flash CPI and US non-farm payrolls, which could further steer rate expectations and metal pricing.