France’s 10-Year OAT Yield Falls as Inflation Eases

2026-02-04 11:58 By Joana Ferreira 1 min. read

France’s 10-year OAT yield eased to 3.44%, near its lowest level since late November, as markets digested weaker eurozone inflation data.

January’s CPI slowed to 1.7%, well below the ECB’s target, while core inflation unexpectedly fell to 2.2%, its lowest since October 2021, raising the prospect that a stronger euro could prompt a resumption of rate cuts paused in June.

The ECB is set to announce policy on Thursday and is widely expected to keep rates unchanged for a fifth consecutive meeting, with ECB President Christine Lagarde expected to reiterate that policy remains in a “good place.” Meanwhile, France’s 2026 state budget was approved by parliament on Monday, ending a months-long stalemate that had fueled concerns over rising fiscal risks in the eurozone’s second-largest economy.

Prime Minister Sébastien Lecornu had initially targeted a 4.7% of GDP deficit, but political concessions pushed the figure closer to 5%.



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