2026.03.0908:06:56UTC+00French 10Y OAT Yield Hits 2011 High Amid Inflation Risks

France’s 10-year OAT yield has risen to around 3.63%, its highest level since November 2011, as mounting inflation risks emerge from the escalating conflict in the Middle East. Now in its second week with no clear resolution in sight, the crisis is stoking fears of disruptions to global energy supplies.

Oil prices have surged above $100 a barrel, driven by production cuts from key regional exporters and the effective closure of the Strait of Hormuz. These developments have amplified concerns over persistent, energy-driven inflation across Europe, prompting markets to revise inflation expectations upward and reinforcing the view that the European Central Bank may need to maintain a tighter policy stance for longer.

Several ECB policymakers have already warned that a prolonged conflict involving Iran could simultaneously push eurozone inflation higher and weigh on growth. Money markets now discount two full 25-basis-point rate hikes by year-end, up from one expected last week, with the first increase almost fully priced in by June.