French unrest fuels bond and share sell-off amid debt concerns

Violent protests across France prompted a sell-off in government bonds and shares, as investors questioned whether the unrest would make it harder for the government to control spending and reduce debt. The market reaction adds to political and fiscal concerns ahead of the 2027 election and the government’s efforts to pass next year’s budget.

France’s 10-year bond yield rose as much as 16 basis points to 4.94%, near a 24-year high, while the gap with German borrowing costs approached its widest in 14 years. France’s debt was 115.6% of GDP in 2025 and its deficit was 5.1%; proposed budget cuts include pensions and government departments, excluding defence. The CAC 40 fell 1.4%, and the euro reached a 17-month low against the pound.