IN the first bond auction since Francois Hollande was elected president, the country sold its five-year benchmark bond at a record low yield, the French debt agency Agence France Tresor said.
Analysts said the auction was a sign that investors consider the country a safe haven amid concerns about the eurozone's debt crisis.
The debt agency sold nearly €8bn of fixed-rate bonds yesterday with all four lines on offer drawing lower yields and solid demand.
Observers believe Mr Hollande's government will be dominated by moderate social democrats after party leader Martine Aubry, overlooked for the prime minister's role, said she would not be in the cabinet.
Ms Aubry, daughter of former European Commission President Jacques Delors and on the left of the Socialist Party, made it clear she was unhappy to accept a consolation post.
Jean-Marc Ayrault, a veteran social democrat, took over as prime minister and was due to announce his cabinet last night. Another moderate, Michel Sapin, is tipped to become finance minister, a post he held almost 20 years ago.
The finance ministry post is expected to go to Mr Sapin who wants to move away from blanket austerity, which he says risks plunging the eurozone into deeper recession.