The drop in French government bonds has accelerated this morning, pushing the premium investors demand to hold its bonds over Germany’s to the highest in three years, as the favourite for the country’s presidency is hit by a swirl of allegations over payments made to his family, the Financial Times reported.

The premium investors demand to own two-year French debt over similarly maturing German bonds climbed to its highest level since the 2013 Taper Tantrum on Monday, as the country’s election looms, the Financial Times reported. The difference between yields on two-year French and German sovereign bonds climbed to 25 basis points on Monday, up from 18.5 bps on Friday and a low of less than 1 bp touched after the US election last November. Yields on the French note climbed 5 bps on Monday, compared to a 2 bp drop in German ones.

A sell-off in eurozone government bonds has left German yields at their highest level in a year, challenging investors who have long become accustomed to low inflation and weak economies keeping market interest rates at record low levels, the Financial Times reported. In France, Germany, Italy, Spain and Austria bond yields have broken through 12-month highs as investors focus on the accelerating pace of inflation, grapple with extra supply and question the longevity of the aggressive central bank stimulus that has dominated fixed-income markets.

Reducing debt in 2017 may be the best course of action for SAP SE, The Wall Street Journal reported. The German software maker is not under much pressure to repurchase shares and make acquisitions, analysts say. Finance chief Luka Mucic told analysts on a conference call Tuesday that share repurchases are an option in the second half of the year, depending on the company’s cash position. Free cash flow increased 21% year-over-year to €3.63 billion ($3.89 billion). Net liquidity improved by almost €2.5 billion or 44% in 2016, Mr. Mucic said. Mark Moerdler, an analyst at Sanford C.

Germany’s largest bank said on Wednesday that it would “substantially limit” bonuses for the 2016 financial year. The announcement comes after it agreed in December to pay $7.2 billion to resolve an investigation by American authorities into its sale of toxic mortgage securities, the International New York Times DealBook blog reported. Concerns about the potential size of the settlement have weighed heavily on the bank’s stock price and its reputation.

A leading German industry chief has warned the UK against expecting any softening of Berlin’s increasingly tough stance on Britain’s plans to leave the EU, the Financial Times reported. Dieter Kempf, who took over this month as president of the BDI, the German employers’ federation, told journalists on Tuesday there could be no question of Europe bowing to British demands for immigration controls, saying the EU’s four freedoms — including the freedom of movement — must not be “put into danger”.

German inflation jumped to within a whisker of the European Central Bank target in December, hitting the highest level in more than three years and providing the euro zone bank with evidence its loose monetary policy is working, Reuters reported. The surprisingly strong surge in consumer prices, however, may put a damper on Germans' appetite for shopping as higher inflation means consumers have less real income to spend.

No wonder Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk. That means Deutsche Bank AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital, if and when the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardized measures.

Deutsche Bank AG employees may have manipulated internal indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses, according to an audit commissioned by German regulators. The study, requested by watchdog Bafin and seen by Bloomberg, says an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008.

The German pilots union VC has announced further strikes at Lufthansa for Tuesday and Wednesday after fresh talks at the end of a four-day walkout failed to settle their long-running pay dispute, the International New York Times reported on a Reuters story. "Unfortunately the high-level talks that took place today at short notice failed to produce a result," VC board member Joerg Handwerg said in a statement on Sunday.