FX.co ★ French 10-Year OAT Yield Falls to December Low

France's 10-year government bond yield, known as the OAT, has decreased to 3.44%, marking its lowest point since early December. This decline comes as investors responded positively to the government's action of advancing the 2026 budget. Prime Minister Sébastien Lecornu's leadership successfully emerged from two no-confidence motions in parliament on Friday, after implementing the revenue section of the budget without a concluding vote in the National Assembly, thereby diminishing short-term political uncertainty. Additionally, investors are anticipating the upcoming release of France's GDP data for the fourth quarter and the Federal Reserve's monetary policy decision set for Wednesday. While the Federal Reserve is generally expected to maintain current interest rates in the short term, the markets are predicting at least two interest rate reductions in 2026, although the precise timing and extent of these cuts remain unclear. Persistent geopolitical tensions also remain a concern, as the US–NATO agreement concerning Greenland's status is yet unresolved, and former President Trump has issued a warning of imposing 100% tariffs on Canada if it proceeds with a trade agreement with China.