FX.co ★ French Bond Yield Falls to Two-Week Low Amid Budget Talks

The yield on France's 10-year government bond fell below 3.45%, marking its lowest point since late October. This shift comes as investors closely follow the progress of France's budget negotiations, buoyed by optimism that a resolution to the US government shutdown might be imminent. Concurrently, disappointing US employment figures have bolstered expectations for a possible rate cut by the Federal Reserve in the coming month. Meanwhile, officials from the European Central Bank maintained a cautious stance, indicating borrowing costs in the eurozone are likely to remain stable in the immediate future. In France, the Parliament has approved the revenue segment of the 2026 Social Security financing bill, paving the way for discussions on the expenditure section this Wednesday. This debate will include consideration of a key measure to suspend certain elements of the 2023 pension reform. Additionally, Bank of France Governor François Villeroy de Galhau signaled a potential revision of growth forecasts for 2025 and 2026, attributing this to the resilience of the French economy despite the current political challenges.