France’s 10-year OAT yield hovered just above 3.25%, after briefly touching its lowest level since July 2025, as investors awaited Friday’s inflation data for signals on how the stronger euro might influence price dynamics and the European Central Bank’s policy trajectory. French government bonds have recently outperformed their peers, supported in part by the approval of France’s 2026 budget earlier this year.
Speaking before a committee of the European Parliament, ECB President Christine Lagarde said headline inflation is expected to move toward the 2% target over the medium term as wage growth moderates. She noted that food inflation—central to households’ perception of rising prices—is projected to hover just above 2% later this year. Lagarde also reiterated that while the ECB will closely monitor foreign exchange developments, it does not intend to intervene directly in currency markets.
At the same time, investors assessed the broader global backdrop, including US President Donald Trump’s announcement of new 10% across-the-board tariffs and a third round of US–Iran nuclear talks in Geneva, set against a backdrop of escalating tensions in the Middle East.
