Rising French bond yields could push up borrowing costs in Canada

France's 10-year bond yield

5 %

France's 10-year government bond yield is close to 5 per cent, its highest level since 2002 and up from about 3.5 per cent in June, according to TD Bank economist Vikram Rai.

France's debt is close to 120 per cent of GDP, and the country is heading into an election period. Investors fear the gap between spending and tax revenue could widen.

Canada's 10-year yield was about 3.8 per cent, up from just over three per cent in March. Bank of Montreal chief economist Doug Porter said Canadian yields have "mostly managed to remain calmer."

And us?

Long-term fixed-rate loans in Canada follow global bond yields more than the Bank of Canada's rate. University of Toronto professor Yoshio Nozawa said those borrowing costs are still likely to rise.