FX.co ★ France 10-Year Bond Yield Holds Near March-Highs

The yield on France's 10-year government bond steadied around 3.60%, nearing the peaks seen in March, as the interplay between monetary policy forecasts and escalating trade tensions captured market attention. Investors are anticipating at least two additional 25 basis point rate reductions by the Federal Reserve within this year, despite recent data highlighting the robustness of the U.S. economy. Conversely, in Europe, the European Central Bank's decision to maintain interest rates for the second consecutive meeting in September has solidified the belief that the cycle of monetary easing may be drawing to a close. Economic indicators present a mixed picture: the services PMI suggests a recovery, whereas the manufacturing industry continues to face challenges in regaining momentum. In trade developments, U.S. President Trump declared a 100% tariff on branded or patented pharmaceutical products, while the European Commission has managed to secure a 15% cap on U.S. tariffs for said products. In parallel, French unions are orchestrating demonstrations on October 2 to urge Prime Minister Sebastien Lecornu to reconsider his fiscal austerity measures.