The 10-year OAT-Bund yield spread held at 144 basis points, trailing only slightly behind Monday’s closing level of 147 points—the widest gap observed since the 2012 sovereign debt crisis. Citi strategist Jamie Searle noted that the risk premium for French debt has entered uncharted territory, leaving market sentiment as the primary driver for price action. Investors are now watching the National Assembly, where a critical vote on the 2027 draft budget bill looms amid significant social unrest.

BlackRock Investment Institute analysts argued the current situation differs from the 2011-2012 crisis, citing a more robust European banking sector and enhanced European Central Bank tools. Despite these defenses, the firm maintains a neutral stance on eurozone bonds, noting that France’s debt-to-GDP ratio has climbed to 119% from 89% in 2011. Across the Atlantic, the Federal Reserve remains the focal point for traders; markets currently assign an 83% probability that the Fed will hold interest rates steady at 3.75%-4.00% during the October 28 meeting.