1.4% above another government bond isn’t ‘junk’

I’ve seen some quips about French 10 bond yields trading at a spread above German 10’s that the French debt is to consider “junk”.

That’s not the case.

You can debt French 10’s and Short German 10’s if you want a pair trade to take advantage of the extreme that I can see….

but I think a government 10 year bond yield from one country would need to trade at least 4% above another government long bond before I’d start categorising it as ‘junk’.

October 4, 2026