LONDON Jan 30 The premium France pays to borrow
over Germany in bond markets spiked to its highest in three
years on Monday as conservative presidential election favourite
Francois Fillon appeared to be losing support.
While polls still show either Fillon or centrist Emmanuel
Macron winning the vote, investors fear a scandal over
allegations of misuse of public funds engulfing Fillon could
open a window of opportunity for the far-right, eurosceptic
Marine Le Pen.
French 10-year bond yields spiked to a 16-month high of 1.12
percent on Monday, widening the gap with benchmark
German equivalents to over 60 basis points for the
first time in three years.
"A widening in French bond spreads is very much related to
political events, with Fillon affected by a scandal," said DZ
Bank rates strategist Daniel Lenz.
(Reporting by John Geddie, editing by Nigel Stephenson)