FX.co ★ France’s 10-Year OAT Yield Nears 14-Year High

In light trading during the holiday season, France’s 10-year OAT yield dipped to 3.55%, maintaining slightly below last week's 14-year peak. This fluctuation comes as investors processed remarks from US President Trump, who suggested that a resolution to the ongoing conflict in Ukraine is "closer than ever," despite unresolved issues in the eastern Donbas region. Additionally, market attention shifted to the Netherlands, where its substantial occupational pension system—the largest in the EU—will commence its transition to a new framework starting January 1. This change will permit the nearly €2 trillion sector to allocate investments into riskier assets. Projections indicate that the 10-year OAT yield will reach approximately 35 basis points higher by the end of 2025, driven by anticipated stable interest rates amid ongoing fiscal uncertainties. Earlier in December, French lawmakers did not reach a consensus on the 2026 budget, leading Prime Minister Sébastien Lecornu to propose emergency measures to extend funding into January, thereby preventing a government shutdown. The complete budget is expected to be approved in early January.