FX.co ★ France’s OAT Yield Nears 2011 Peak on ECB Hikes

France’s 10-year OAT yield climbed to 3.68%, nearing its 2011 peak, as surging energy prices and a hawkish European Central Bank stance fueled expectations of multiple rate hikes in 2026. Brent crude rose above $110 per barrel following refinery attacks in the Middle East, amid reports of potential U.S. action against Iran’s Kharg Island, a key oil export hub. Money markets are now pricing in at least two ECB rate increases this year, with a possible third, after the bank kept policy rates unchanged but raised its inflation projections and downgraded its growth outlook. Joachim Nagel indicated that an April hike is possible if inflation pressures intensify, while François Villeroy de Galhau underscored the ECB’s determination to respond forcefully as geopolitical risks mount.