French bond yields increase as French presidential campaign gets heated

The left-wing laggards in France’s presidential campaign are talking about uniting, a move that may elbow out centrists from the second round and improve the anti-euro Marine Le Pen’s chances of victory.

French 10-year yields climbed two basis points to 1.03% in Paris, widening the spread over similar-maturity German bunds by six basis points. France’s CAC 40 fell 0.9%, led by bank stocks.

“This is clearly not a positive for French bonds,” said Kim Liu, a strategist at ABN Amro Bank. “It increases the odds of a Le Pen victory, with French bonds already being very vulnerable to political risks.”