PARIS: The interest rate earned by holders of French 10-year government bonds fell to a record low in early trading on Thursday in a sign investors see France as a safe haven from economic troubles in Spain.
Around 0730 GMT, the yield on French 10-year debt sank to 2.351 percent, breaking a previous record set on May 25.
By around 0750 GMT, the yield was at 2.369 percent, against 2.464 percent at closing on Wednesday.
France also narrowed its bond spread with Germany to 1.1 percent. The German rate was up slightly to 1.272 percent.
"France is benefitting from a fairly confused context in Europe. There are no purely French factors behind this," said Frederik Ducrozet, an economist at Credit Agricole CIB.
Still, he said the fall was a sign that the market clearly saw France as among the top-tier investments in Europe.
"The market's verdict for now is that France ranks with Germany and Austria" on the debt market, Ducrozet said.
He also noted that the fall came despite warnings from Brussels on Wednesday over France's 2013 deficit and upcoming parliamentary elections on June 10 and 17.
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