Costs to insure French sovereign debt against default surged to 71.6 basis points on Oct. 1 as the rout in the country's bonds widened. The 5 year credit default swap rate indicates the highest risk premium since July 2013, while long dated Treasury yields reached 24 year highs as investors sold off French government debt.

The volatility follows a climb in France's 10 year yield spread over Germany to 124 basis points, leaving Paris paying 22 basis points more than Italy to borrow in an unprecedented reversal for the euro era. Political uncertainty, accelerating inflation, and a budget deficit projected at 5.4% of GDP are weighing on sentiment as the government prepares a record €340 billion bond issuance in 2027. In some cases, blue chip companies like LVMH are now borrowing at lower rates than the French state.