European bond and equity markets saw a fresh sell-off on Monday, 19 October 2026, as the French government introduced widespread curfews to manage riots across the country. The 10-year yield on French bonds, reflecting the government's borrowing costs, spiked by around 13 basis points to 4.9 per cent. This led to the spread between French and German 10-year yields widening to its highest closing level since early 2012.
The sell-off extended across Europe, with Italy's 10-year yield rising by 10 basis points amidst its own violent clashes. Andrew Kenningham, chief European economist at Capital Economics, suggested that France appears to be heading for a fiscal crisis, which could lead to contagion and a potential recession in the Eurozone.
Volatility also impacted equity markets. France's Cac 40 was down 1.5 per cent, Germany's DAX fell 1.5 per cent, and Amsterdam's AEX dropped 0.5 per cent. In London, the FTSE 100 slumped 1.2 per cent, driven by a sell-off in miners and banks. The UK's 10-year gilt yield increased by over four basis points, though analysts noted that UK bond markets were less affected than those in mainland Europe.
Richard Carter, head of fixed interest research, stated that while French bonds faced renewed pressure, the situation in the UK has been calmer for gilts ahead of the upcoming Budget. He also highlighted elevated tensions in the oil market, with Brent crude trading above $108 on Monday afternoon after a five per cent rally last week, reaching a five-month high.