PremiumHow Close Is Europe To Another "Whatever It Takes" Moment? Goldman Builds A Fragmentation Alarm To Find Out
It's starting to feel like 2011 again in European bond markets, only this time the epicenter isn't Athens or Rome, it's Paris.
On Tuesday the French-German 10-year spread broke back above 150bps, with Bloomberg flagging the Oct. 2 high of 159.2bps as the level to watch. By the close, the OAT-Bund spread was 5bps wider at 153bps after touching 157bps intraday, while French 10Y yields sat at 4.92%, a few bps from the 2002 highs hit earlier this month. This came a day after French 10Y yields surged 16bps, the biggest one-day jump since March 2025, as the country put riot-hit cities under curfew after the interior minister admitted police had "lost control" (Oct 19). Goldman's rates desk summed up Monday's damage tersely: OATs "continued to underperform (10y +13bp) following weekend protests."