Global bond markets are stabilizing after a French sell-off sparked concerns about fiscal stability, reminiscent of the eurozone crisis. France's borrowing costs surged due to political uncertainty ahead of 2027 elections and record public debt levels, widening the spread between French and German bond yields to levels unseen since 2012.
Long-term government bond yields are rising globally, with France and Italy facing crisis-level spikes as markets price in hawkish central banks and geopolitical risks. The ECB's constraints on intervening due to tight sovereign spreads over Germany leave these countries vulnerable to further yield increases.