France's 10 year borrowing cost just spiked as much as 16 basis points in one day to 4.94%, its biggest one day jump since March 2025 per Bloomberg

Investors are dumping French debt after the country's worst unrest in years, with hundreds of thousands marching over the cost of living and more than 2,400 arrests as cars and buildings burned

France now pays more to borrow than Italy (4.57%) and Greece, and roughly 1.4 percentage points more than Germany (3.42%), a gap last seen during the eurozone debt crisis

The 10 year yield already hit 4.99% earlier this month, the highest since 2002

The CAC 40 fell as much as 1.7%, with BNP Paribas and Societe Generale both down more than 2%

Debt to GDP is now about 119%, up from 98% in 2019 and 65% in 2007, and the deficit sits near 5% vs the EU's 3% limit

Moody's reviews France's credit rating on Friday, while the 2027 budget fight is the same battle that toppled two of PM Lecornu's recent predecessors

As one RBC BlueBay strategist put it, "either the bond markets riot, or the people riot, or both"

This is the setup bond investors fear most, a government that needs painful cuts facing a public that is already in the streets before the cuts even start. With nearly 60% of French debt now held by foreigners, a Moody's downgrade on Friday could turn a bad Monday into a real funding scare, and that is a risk even a 2% Nasdaq rally can't fully paper over

Source: StockMarket.News