European bond market calms, as focus shifts to FX | FXStreet

European bond markets were calmer on Monday as attention shifted to FX, with the euro dropping to a 17-month low and investors weighing whether recent bond stress will persist. While political and fiscal gridlock in France has kept pressure on European pricing—reflected in the French–German 10-year yield spread—French and Spanish yields were falling and bond prices rising, particularly at the short end. The article notes the move may be temporary after yields surged in recent weeks. French stocks were weak, with the CAC down 1.2%, and banks under pressure. EUR/USD hovered below $1.12, and oil prices—Brent around $101.70 per barrel—helped stabilize the backdrop.