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"It's the first French auction of the year and it has broadly gone as expected"
- Peter Goves, a fixed-income strategist at Citigroup Inc.
French long-term bond yields rose on Thursday at its first auction in 2012 as investors are worried the country may lose its top notch AAA credit rating. France sold 4.02 and 2.165 billion euros of 10-year and 30-year bonds at an average rate of 3.29 and 3.97 per cent, respectively.
"It's the first French auction of the year and it has broadly gone as expected," said Peter Goves, a fixed-income strategist at Citigroup Inc. in London. "Where France is trading, a lot of negatives are in the price, especially downgrade concerns. Spanish and Italian sales will be more of a litmus test for the market."
"Overall it's a pretty solid auction. When you look at things like bid-cover and particularly the price action going into the auction, where quite a concession was built in, it's nothing to get excited about," Michael Leister, Strategist at DZ Bank in Frankfurt said. "But, at the same time it should be enough to dispel concerns with regards to France's funding capacity for the time being."