The yield on the French 10-year OAT rose to 2.9% in mid-April, approaching levels last seen in March, as fears of banking failures waned and added to the European Central Bank’s tightening leeway. Several ECB policymakers warned that inflationary pressures remained a threat in the currency bloc, stressing the need for further hikes amid a tight labor market and rapid wage growth. Domestically, headline inflation overshot estimates and stood at 5.6% in March. In the meantime, traders continued to monitor risks to the French economy from disputes over the retirement age. The French Constitutional Council is set to vote on President Macron’s effort to raise the retirement age by two years to 64 without the lower house’s vote. While the move eases fiscal pressure on the French economy, political turmoil keeps the pressure on bond prices.
Historically, the France Government Bond 10Y reached an all time high of 11.84 in February of 1985. France Government Bond 10Y - data, forecasts, historical chart - was last updated on April of 2023.
The France Government Bond 10Y is expected to trade at 2.80 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 3.28 in 12 months time.