Is France heading the same way as Italy?

Secondary market spreads for covered bonds have visibly widened this week, but by a much greater extent than screen prices would suggest. Dealers widely admit that they are bidding away from the market, as viewed over broker screens, as they are keen to avoid increasing exposure into year-end. If actual bids are taken into consideration, the spread widening seen this week has been much greater. Italian and Spanish covered bonds now trade significantly through the sovereign while French covered bonds are on the cusp of doing so.