FX.co ★ France’s OAT Yields Dip on Iran War Optimism

France’s 10-year OAT yield slipped toward 3.6%, pulling back from multi‑year highs, as growing expectations of a swift resolution to the Iran conflict eased concerns over surging energy prices and the prospect of aggressive ECB tightening. Cautious optimism was supported by US President Donald Trump’s comment that the US could withdraw from Iran “in two or three weeks,” deal or no deal, although mixed signals from Washington continue to cloud the outlook in the war’s fifth week. Markets have scaled back their projections for ECB rate hikes, now pricing in only two increases by December, down from three earlier this week. Prior to the conflict, investors had not anticipated any hikes in 2026 and saw only a small probability of policy easing.