FX.co ★ France’s 10-Year OAT Hits Highest Since 2011

France’s 10-year government bond yield has increased to 3.6%, marking its highest point since November 2011. This rise builds on last week’s gains, influenced by the European Central Bank's (ECB) firm stance and growing concerns regarding France's public finances. In its recent decision, the ECB kept interest rates steady for the fourth consecutive session, indicating that borrowing costs are anticipated to remain at their current levels for some time. The ECB noted that the eurozone has withstood U.S. tariffs better than anticipated. Concurrently, the Bank of France has adjusted its GDP forecasts upward, predicting growth of 0.9% in 2025 (up from 0.7%) and 1% in 2026 (a revision from 0.9%), while maintaining moderate inflation levels. In terms of fiscal policy, a recent setback occurred as lawmakers failed to pass the 2026 budget during joint committee discussions, compelling the government to seek emergency measures to extend the 2025 budget. Prime Minister Sébastien Lecornu expressed disappointment that the parliament will be unable to vote on the budget before the end of the year on December 31.