FX.co ★ French 10-Year Yields Ease on Safe-Haven Demand

The yield on France's 10-year OAT has slightly declined, settling around 3.5%. This movement reflects investors' growing preference for safe-haven assets amidst escalating trade tensions fueled by new threats from U.S. President Donald Trump. Additionally, attention is drawn to France's internal budget negotiations. President Trump has issued a warning of potential new tariffs on eight European countries, including France, should the U.S. be barred from "purchasing" Greenland. Economists predict the United Kingdom and Germany, being Europe’s most significant exporters to the U.S., would face the most substantial repercussions. Analysts also warn that any attempts to claim Greenland could result in enduring damage to NATO alliances. In retaliation, the European Union is considering comprehensive measures, potentially imposing tariffs reaching up to €93 billion on American products. Domestically, France is making strides towards achieving a budget agreement for 2026. This progress comes after Prime Minister Sébastien Lecornu made concessions to gain the Socialist Party's backing, though the proposal still encounters an uncertain fate in parliamentary proceedings.