A New World Debt Order Emerges As France Stumbles And Argentina Rises

(MENAFN- Investor Ideas) ) a trusted platform for investing ideas including AI and robotics stocks issues market commentary from deVere Group.

France's borrowing costs smashing through 5% is the starkest sign yet the world's debt order has flipped, with rich nations now paying the kind of price once reserved for serial defaulters like Argentina.

This is the warning from the CEO ofdeVere Group, one of the world's largest independent financial advisory organisations, as France's 10-year yield tops 5% for the first time since 2002, its premium over Germany records the sharpest weekly jump in 17 years, and the US 30-year Treasury yield pushes above 5.7%.

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The pressure on France is intensifying fast. Its government last week unveiled a 2027 budget with EUR 43 billion of new savings and revenue measures to tackle a deficit running at 5.4% of GDP. Debt interest is already the country's largest single budget expense, and its fiscal watchdog calls the plan's assumptions "optimistic."

A major rating agency reviews France later this month.

Argentine spreads have since widened again as US yields surged, a reminder the recovery remains fragile.

Britain and the US are feeling the same pressure. Britain's 30-year gilt yield has hit 6%, a 28-year high.

In the US, the Federal Reserve raised rates on 16 September for the first time since 2023, lifting its target range to between 3.75% and 4% as inflation refused to fade.

The US lost its last top-tier credit rating last year, and deficits still run into the trillions.

Emerging market debt, by contrast, has clearly outperformed developed market government bonds since late August, helped by average inflation in developing economies of around 3.8%.

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