France's 30-year yields hit highest since June 2009 on fiscal concerns

By Stefano Rebaudo

Sept 2 (Reuters) - France’s 30-year government bond yields surged to their highest levels in over 16 years on Tuesday, driven by fiscal concerns, as Prime Minister François Bayrou began talks with political parties in a bid to prevent a government collapse.

France’s far-right National Rally said on Monday it was preparing for snap elections, anticipating that opposition parties will bring down the minority government in a vote scheduled for September 8.

France’s 30-year government bond yields FR30YT=RR hit its highest since June 2009 at 4.513%, up 6.5 basis points.

Ultra long-dated government bond yields have come under selling pressure as markets expect Germany’s investment plans, along with likely increases in defence spending across euro area countries, to push up debt levels.

Germany's 10-year bond yield DE10YT=RR, the benchmark for the euro zone bloc, rose 4 bps to 2.79%. Yields on 30-year German bonds DE30YT=RR reached a fresh 14-year high at 3.41%.

Britain's 30 year gilt yield hit its highest since 1998.

Spain’s 30-year yields ES30YT=RR were up 5 bps at 4.29%, after hitting 4.297%, its highest since November 2023.

Italy’s 30-year yields IT30YT=RR reached their highest since April at 4.661%.