Bank of France: the difference in French bond yields leads the overall spread of eurozone yields to widen.

The interest rate strategist of Crdit Agricole said that due to the widening spread between French and German bond yields and supply pressures, the yield spread on Eurozone government bonds continued to widen this week. Supply pressures arose from France's auction of 14 billion euros of long-term French government bonds on Thursday. However, they stated that with supply expected to decrease as we enter the summer, there is room for the yield spread to narrow in the short term. "If seasonal factors come into play in the summer, we should see some tightening in the coming weeks." Strategists also mentioned that the market may refocus on fiscal dynamics, foreign capital flows, and political risks in France. "In the event of renewed political pressure, we expect French government bonds to underperform Italian bonds and Spanish government bonds." According to Tradeweb data, the spread between 10-year French and German bond yields stands at 77 basis points.