The pressure on France continued to intensify ahead of the auction today assuring that the top credit rating for the nation is surely at risk!
The 10-year French bond spread to that of its German counterpart rallied to a high of near 200 bp on Thursday amid mounting fears over the spread of the contagion. The CDS (Credit Default Swaps) on French bonds also rallied to a record complicating the scenario for France as it auctions new government debt.
Spain also came under heavy pressure with the CDS at record, yields surging and the spread widening to record. The nations sold 10-year bonds with record 6.97% and missed the target selling 3.5 billion euros below 4.0 billion euros target.