13.01.202610:37:29UTC+00France’s 10-Year OAT Yield Rises Ahead of US Inflation Data

On Tuesday, the yield on France’s 10-year OAT increased to 3.54%, recovering from its lowest point in more than a month at 3.50% on Monday. This movement comes as investors await the US inflation data for further clues on the direction of monetary policy. Concerns about the Federal Reserve’s independence have slightly diminished following a pushback from several Republican lawmakers against a Justice Department criminal probe involving Fed Chair Jerome Powell. Meanwhile, in Europe, ECB Governing Council member François Villeroy de Galhau dismissed the notion of an ECB rate hike this year as a misguided “fanciful” expectation. Addressing France’s fiscal health, he emphasized the need for lawmakers to reduce the budget deficit to at least 5% of GDP this year, cautioning that exceeding this threshold could place the nation in a "danger zone." The failure to pass the 2026 budget by the end of the year necessitated interim stop-gap measures, with negotiations recommencing on Tuesday amidst ongoing uncertainty regarding the final outcome.