Europe’s Risk Map Has Flipped — France Replaces GreeceA decade ago, Greece symbolized the eurozone’s sovereign crisis — junk-rated, under bailout supervision, and trading with spreads above 3,000 bps vs the German Bund.
France, meanwhile, was near AAA, considered the cornerstone of European credit stability.
Today, that map has flipped.
🔹 Greece now sits in the middle of the pack — its spread has collapsed to ~70 bps, after years of fiscal reform and ECB backstops.
🔹 France, once a core safe haven, is now the worst-rated among the major euro economies.
All three major agencies — S&P, Moody’s, and Fitch — have progressively cut its rating, pushing it down from AA to the lower A range, only six notches above junk.
🔹 Italy remains the barometer of European risk, but France’s fiscal slippage and high deficit (≈5% of GDP) are now drawing the spotlight.
The combination of these two charts tells a clear story:
The “peripheral” risk has converged, while “core” credibility has eroded.
Europe’s sovereign hierarchy is no longer what it used to be.
France Government Bonds 10 YR Yield
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Market insights
Credit Risk FRANCE: 2 Decisive BarometersSince the announcement of the confidence vote on September 8, 2025, the French political situation has been plunged into deep uncertainty. Prime Minister François Bayrou, who leads a minority government, faces a determined opposition that has already announced it will vote against him, making his continuation at Matignon very unlikely. This political fragility immediately weighed on market confidence: risk premia and borrowing costs are rising for the government and French companies.
In the event of the government’s fall, the possibility of early elections and the prospect of new social tensions, with mobilizations planned as early as September 10, heighten concerns. In this context, the authorities are attempting to reassure by insisting that France remains economically sound and that a 2026 budget will be adopted on time, with perhaps the establishment of a so-called “technical” government rather than another dissolution of the National Assembly.
This uncertainty may put pressure on French sovereign interest rates and thus destabilize French banks and companies, with a contagion effect across the Eurozone.
Will the situation worsen or, on the contrary, improve this September for France and the Eurozone?
Here are two market barometers to monitor very closely, which will be highly relevant in measuring the positive or negative evolution of this “France” risk.
1. Primary barometer of “France” risk: the 10-year interest rate spread between France and Germany
The long-term bond yield spread between France and Germany represents the ultimate risk barometer for French public debt. The wider this spread, the more the market anticipates difficulties for French public finances.
I am currently placing this market proxy under close surveillance, as its upward trajectory could become worrying beyond a certain threshold. Conversely, if French political uncertainty eases, this spread will decline, which would be a positive signal for European financial assets.
The chart below shows, on a closing basis, the 10-year yield spread between France and Germany:
2. Secondary barometer to watch: the value of the French 10-year bond yield compared with the Italian 10-year bond yield
A second interesting barometer is the absolute gap between the French 10-year sovereign yield and the Italian yield. The French rate has never been higher than the Italian one, and if this were to occur, it would send a very negative market signal for France, its banks, and its companies. At present, the French yield remains lower than the Italian one.
The chart below shows the French and Italian 10-year bond yields in the form of daily candlesticks:
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Spread OAT/BUND Over seven in ten French people (72%) hope that Francois Bayrou's government does not obtain a majority of votes in the National Assembly on 8 September. The Rassemblement National (RN), La France insoumise (LFI) and the Ecologists, as well as the socialists have already said that they will not give their confidence to the government
France 10 Year bond Sun Storm Investment Trading Desk & NexGen Wealth Management Service Present's: SSITD & NexGen Portfolio of the Week Series
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By Sun Storm Investment Research & NexGen Wealth Management Service
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Disclaimer: Sun Storm Investment and NexGen are not registered financial advisors, so please do your own research before trading & investing anything. This is information is for only research purposes not for actual trading & investing decision.
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FR10Y at major resistanceI do not see 10 Yr French gov. bond yield break the resistance of this bearish canal. Paris CBD offices trade at c.2.7% yield which implies an already compressed spread. Further compression would likely cause a RE crash and a recession. This is true for RE and probably for other sectors too.
Declining yields could result from a variety of factors though i do not beleive in the rosy ones
France 10 Years Bond Europe Sun Storm Investment Trading Desk & NexGen Wealth Management Service Present's: SSITD & NexGen Portfolio of the Week Series
Focus: Worldwide
By Sun Storm Investment Research & NexGen Wealth Management Service
A Profit & Solutions Strategy & Research
Trading | Investment | Stocks | ETF | Mutual Funds | Crypto | Bonds | Options | Dividend | Futures |
USA | Canada | UK | Germany | France | Italy | Rest of Europe | Mexico | India
Disclaimer: Sun Storm Investment and NexGen are not registered financial advisors, so please do your own research before trading & investing anything. This is information is for only research purposes not for actual trading & investing decision.
#debadipb #profitsolutions
Bond Yield : From Negative to Positive and Negative AgainJapan and German Bond Yield just recently enter a positive area.
These Bond Yields previously have moved in a negative area since Investors keep buying those assets. But since the outbreak, Investor seems to ignore safe heaven and hoard cash. They sold Japan and German Bond so those bond yields are increasing since the prices are decreasing.
France Bond Yield is in a negative area which means Investor is still keeping that bond. US Treasury Yield is still positive but Investors believe that the yield soon touches zero-line and enters a negative territory.
I monitor these Yields to measure how investor reacts to the outbreak and possible global recession.














