French Debt: OAT/Bund Spread Stabilizes at 70 Basis Points, Far from Peaks
3.62% OAT: Declining Rate, Spread Remains High
This Wednesday, the yield on the French 10-year OAT stands at 3.62%, down 11 basis points from the previous session. The German 10-year Bund, the eurozone's « risk-free » benchmark, is simultaneously trading at 2.92%.
The gap between the two bonds — the OAT/Bund spread — is at 70 basis points, which is 3 basis points less than the previous day (73 bp). This slight narrowing is part of a gradual easing trend observed since mid-March: the spread still reached 83 bp on March 23 and 81 bp on March 27 before beginning to decline.
Compared to the 30-day average of 73.3 basis points, the current level is 3.3 bp lower, confirming a slight recent improvement. Nonetheless, the indicator remains classified in the « high tension » zone: since early March, the spread has not consistently fallen below the 60 basis point threshold, which was briefly reached at the end of February.
A Structurally Established Risk Premium on French Debt
A spread of 70 basis points essentially means that France borrows at ten years with an additional cost of 0.70 percentage points compared to Germany. On a public debt stock exceeding 3,500 billion euros, this differential impacts interest payments with each new bond issuance.
From a historical perspective, the current level remains far from the peak recorded during the European sovereign debt crisis: the OAT/Bund spread reached 225 basis points on November 17, 2011, at the height of the turmoil that then shook the entire eurozone. The current situation is therefore not comparable to an episode of systemic stress.
Nonetheless, it reflects a structurally higher risk premium than before 2024, during which the spread regularly hovered around 50 to 55 basis points. Ongoing concerns about the trajectory of French public finances — with a public deficit exceeding 5.1% of GDP in 2025 — continue to justify a gap with Berlin. The day's market rally, spurred by the surge of the CAC 40 (+4.73%), has not fundamentally altered this equation in the bond market.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
