European bond returns rise in the midst of French political unrest

The interest on government bonds from the eurozone rose unexpectedly a day after French Prime Minister Sebastien Lecornu resigned, so that the political crisis in the second largest economy in Europe was deepened. French President Emmanuel Macron gave his departing Prime Minister, who had previously resigned, on Monday the assignment to have last desperate conversations with other political parties to try to set out a way out of the crisis.

Lecornu submitted the resignation of his government only a few hours after the announcement of his cabinet arrangement, making it the short -lasting government in modern French history.

The German ten -year interest rate, the benchmark for the Eurozoneblok, rose by 1.4 basic points to 2.73%.
The French ten -year interest rate rose by 2.7 basic points to 3.599%.

As a result, the interest roof between Safe-Haven Bunds and French government bonds with a term of ten years-a market buddy for the risk premium that investors demand to maintain French government bonds-remained at 83 basic points. The spread reached 87.96 basic points on Monday, the highest level since January 13. In the meantime, the returns on Japanese government bonds withdrew from record heights, after a well-monitored sale of 30-year-old debts went smoothly, despite ensuring that the likely following prime minister of the country will relax the budget discipline.

After the sharp rise in the 30-year financing costs in Japan, the ultra-long bonds throughout Europe also came under pressure. The interest on German government bonds with a duration of 30 years increased by 2.4 basic points to 3.32%. The French 30-year interest rate rose by 3.2 basic points to 4.43%. The Italian 30-year interest rate rose by 3.7 basic points to 4.51%. In the field of data, German industrial orders fell in August for the fourth month in a row, especially as a result of a weak car industry and a decrease in foreign demand, according to the Federal Statistics Agency Tuesday.