FX.co ★ France’s 10-Year OAT Yield Falls to One-Month Low

France's 10-year OAT yield has decreased to approximately 3.5%, a level not seen since early December, as the market absorbed weaker-than-expected inflation figures and awaited updates on the country's budget talks. Preliminary data from the Eurozone indicated that inflation slowed to a four-month low of 2% in December, aligning with the European Central Bank's (ECB) target, while core inflation declined slightly to 2.3%, just under the anticipated 2.4%. In France specifically, the EU-harmonized CPI showed a modest increase of only 0.7% year-on-year, which is the weakest figure since May and came in below the predicted 0.8%. Currently, market participants are also keeping a close watch on France’s ambitious plan to issue €310 billion in debt, scheduled for 2026. The French government commenced the year without an approved budget, as lawmakers could not pass the 2026 finance bill in December. To maintain financial operations, the authorities have invoked a special emergency budget law, thereby temporarily continuing last year's budget until a new one is accepted.