FX.co ★ France 10-Year Bond Yield Near December Lows

France's 10-year OAT yield remains steady near 3.50%, which is close to its lowest level observed since December 3, as investors keep a close eye on the ongoing budget discussions for 2026, coupled with fresh apprehensions regarding the autonomy of the US Federal Reserve. Political uncertainty has been heightened by motions from the far-right National Rally and the leftist France Unbowed, pushing for confidence votes concerning the EU-Mercosur trade agreement. However, immediate pressure has slightly lessened after the Socialist Party announced it would not back these motions. Nevertheless, the budget minister cautioned that any potential collapse of the government next week might delay the adoption of the finance bill until after the municipal elections in March. In a parallel development in the United States, the Justice Department's subpoena of the Federal Reserve over cost overruns at its headquarters has intensified market anxiety about the central bank's independence. Meanwhile, investors are also anticipating US inflation data expected on Tuesday, which could provide further insights into the future course of monetary policy.