FX.co ★ France’s Yields Steady as Budget Talks Drag On

France's 10-year OAT yield remained stable above 3.4%, hovering near its highest levels since mid-October. Investors are closely watching ongoing budget negotiations and the future of monetary policy following recent meetings of the ECB and the Federal Reserve. Olivier Faure, leader of the Socialist Party, stated that his party will wait for the complete 2026 budget to be finalized before deciding whether to challenge France's minority government. Prime Minister Sébastien Lecornu aims to pass the budget without resorting to Article 49.3, which allows the government to circumvent a parliamentary vote. In an effort to secure support and avoid snap elections, Lecornu has proposed several compromises, such as postponing pension reforms and increasing corporate taxes on large companies, although the center-left remains unsatisfied with the current budget. Regarding policy, the ECB has maintained interest rates for a third consecutive meeting, describing its approach as “appropriate,” while Federal Reserve Chair Jerome Powell warned that rate cuts in December are "not a foregone conclusion."