French-German Bond Yield Gap Stabilize

The French-German borrowing costs spread has stabilized, shifting to the same level as before crisis in 2010-2012. Back in February, when there was a presidential race in France, the spread expanded 80 bps. But, since then the gap has tightened. And current data indicates that France’s 10-year government bond yield spread over Germany reduced to 15 bps. All Southern European bond yields dropped 4-6 bps.