French 10-Year OAT Yield Tops 5% for First Time Since 2002 as Political Turmoil Weighs on Euro Zone Bonds

French 10-year OAT yields climbed above 5% on Wednesday for the first time since July 2002, rising 8 basis points and more than 20 bps this week, as nationwide protests deepened concerns over France's fragile finances and political uncertainty. The French-German yield spread stood at 150 bps, the widest among major euro zone sovereign bond markets and near early October's 15-year high of nearly 160 bps. The weekly move was the sharpest among major bond markets, where yields rose an average of 5.7 bps, LSEG data showed. Italian 10-year yields rose 8 bps to 4.6047%, with the Italian-German spread widening 4 bps to 116 bps. German 10-year yields gained 3.4 bps to 3.4274%, while two-year yields rose 4 bps to 3.0940%. Oil's rebound above $110 a barrel added pressure on bond markets. A weakened French government is struggling to pass a budget and reduce a large deficit ahead of next year's election.