French-German 10-year yield spread narrows to 150 bps after ECB rate decision

The spread compression suggests markets read the ECB decision as relatively neutral for peripheral risk, with French paper gaining ground against bunds even as German yields held firm. The more telling signal is the euro's slide to a 17-month low, which points to rate-differential and growth concerns dominating over any intra-euro-area stress narrative. For European credit and cross-border funding desks, the question is whether this spread tightening persists if currency weakness continues, or whether a softer euro eventually reopens the fiscal and political risk premium that has kept French yields elevated.