France’s 10-Year OAT Yield Nears 14-Year High

France’s 10-year OAT yield rose to 3.6%, approaching Friday’s 14-year high of 3.67%, as fresh Middle East attacks revived inflation worries ahead of major central bank decisions. Oil prices surged after Israel targeted Iran’s Asaluyeh refinery and the South Pars gas field, while Iran’s Revolutionary Guard ordered evacuations at oil sites in Saudi Arabia, the UAE, and Qatar. With energy costs climbing, markets are bracing for stricter monetary policy from global central banks. While the ECB, Federal Reserve, and Bank of England are expected to keep rates unchanged this week, investors are seeking clues on how policymakers will counter the economic fallout from the deepening crisis.

France’s 10-year OAT yield dipped toward 3.5%, below Friday’s 14-year peak of 3.67% as investors adopted a cautious stance ahead of slew of central bank decisions. Persistently rising oil prices, fueled by the escalating US-Israeli conflict with Iran, continue to amplify inflation concerns. Markets are now pricing in a tighter monetary stance from the European Central Bank by year-end, with money markets fully anticipating a rate hike by July and assigning an 85% probability to a second increase by December. This week, the ECB, Federal Reserve, and Bank of England are all expected to hold interest rates steady, with investors closely monitoring for signals on how policymakers plan to mitigate the economic repercussions of the ongoing conflict.

France’s 10-year OAT yield hovered around 3.6%, close to its highest level since November 2011, as escalating Middle East tensions fueled inflation fears and strengthened expectations of further European Central Bank tightening ahead of a week crowded with global central bank meetings. Oil prices remained above $100 per barrel, rising more than 40% this month, after Iran halted shipments through the Strait of Hormuz in response to US-Israeli air strikes. Israeli officials warned the conflict could persist for “several more long weeks,” while US President Donald Trump said Tehran is “not ready” to reach a deal. Major central banks, including the European Central Bank and the Federal Reserve, are expected to keep interest rates unchanged this week, while traders are watching closely for guidance on how policymakers may respond to the conflict’s economic impact. Money markets fully price in an ECB rate hike by July, with roughly an 85% chance of a second increase by year-end.