French Government Bond Risk Premium Hits 110bps, First Time Since 2012

A 110bp spread over bunds puts French sovereign risk back in territory last seen during the eurozone crisis, a notable shift for what has long been treated as core euro-area credit. The widening matters beyond France: it feeds directly into the pricing of euro-denominated collateral and risk-free benchmarks that underpin much of on-chain fixed income and RWA yield structures. Whether this reflects a durable repricing of French credit or a temporary risk-premium spike is the open question, and it is the bund spread, not any single bond yield, that will signal which.