Big Investors Buy Eurozone Debt After French 10-Year Yield Nears 5%
Updated
Updated · Financial Times · Oct 8
Big Investors Buy Eurozone Debt After French 10-Year Yield Nears 5%
1 articles · Updated · Financial Times · Oct 8
Summary
Italian bonds, European investment-grade credit and some French corporate debt drew fresh buying after France’s sell-off spilled across eurozone markets, with investors betting contagion fears have overshot fundamentals.
France’s 10-year yield climbed to 4.92% after touching almost 5%, while its spread over German Bunds widened to 1.4 percentage points and Italy’s to more than 1.1 points.
Aberdeen, Schroders, W1M and Ninety One said they added exposure to assets hit by the turmoil, favoring Italian debt and broader credit over direct purchases of French sovereign bonds.
French bonds remain volatile despite a brief rally on Marine Le Pen’s fiscal pledges, as oil-driven yield moves and uncertainty over public finances ahead of the April presidential election keep investors cautious.
ECB backstop tools are helping investors argue this is not a replay of the early-2010s eurozone debt crisis, even as France’s central bank chief said intervention is not needed.