FX.co ★ French 10-Year OAT Yield Holds at One-Month Low

The yield on France's 10-year OAT remains steady around 3.46%, marking its lowest point in a month. This stability comes as President Emmanuel Macron announces a new cabinet aimed at managing an escalating political crisis. Sébastien Lecornu, who resigned earlier, was reappointed last Friday and is now responsible for presenting a revised budget. Should the budget fail to pass, the deficit for 2026 could escalate to approximately 6%, compared to the estimated 5.4% for this year. The government faces potential jeopardy, as a no-confidence vote in parliament is anticipated later this week, heightening the uncertainty surrounding France’s fiscal prospects. On a broader economic front, the probability of a 25-basis-point rate cut by the European Central Bank by July has increased to about 55%, up from roughly 45% previously, following President Trump's recent threat to impose 100% tariffs on Chinese imports.