François Hollande: French rates reach their lowest level in history

Today, under the "reign" of François Hollande, the rate on French 10-year bonds has fallen to its lowest level in history. Since the new French president took office, long-term rates have steadily declined.

Records are piling up

The 10-year yield, which moves in the opposite direction to demand, fell to 2.471% from 2.531% the previous day. A few minutes earlier, it had fallen to 1.414%, surpassing its previous closing record of 2.467%, set on August 31, 2010. As for the yields on 2- and 5-year maturities, they also reached their lowest levels at 0.399% and 1.259%.

The yield gap between the benchmark French bond and the German bond has narrowed to 104 basis points, or 1.04 points, compared to 146 basis points around May 15; which means that the confidence deficit prevailing in France, compared to Germany, is tending to narrow.

Under the circumstances, the maintenance of the triple A rating granted to France by the Moody's agency this week could only strengthen the confidence of the French in the national debt.

Decline in borrowing rates

The day after François Hollande's election, short-term borrowing rates fell (on two of the three lines offered by the Treasury to investors). On this occasion, this demand was even two to three times greater than the AFT's supply.

Thanks to the French Treasury's auction, tensions are easing on European stock markets, despite the fact that the market remains worried about rumors about Greece's possible exit from the Eurozone.