French OAT Yields Surge to 18-Year High
France’s 10-year OAT yield jumped to 4.6%, its highest level since July 2008, as oil prices rebounded amid continued uncertainty surrounding US-Iran talks and investors digested stronger-than-expected PMI data. Eurozone private-sector activity expanded in September at its fastest pace in nearly three and a half years, reinforcing expectations that the European Central Bank could raise interest rates further this year. ECB official Joachim Nagel said rising oil prices were becoming increasingly important for monetary policy, while Chief Economist Philip Lane warned that another energy-price surge could keep inflation elevated for longer. In the US, hawkish Fed comments and strong PMI data also lifted expectations for further rate hikes. Meanwhile, concerns over France’s public finances continued to weigh on sentiment, as the government struggles to rein in spending. The budget deficit is now expected to widen to 5.4% of GDP this year, up from 5.1% in 2025.
6%, its highest level since July 2008, as oil prices rebounded amid continued uncertainty surrounding US-Iran talks and investors digested stronger-than-expected PMI data. Eurozone private-sector activity expanded in September at its fastest pace in nearly three and a half years, reinforcing expectations that the European Central Bank could raise interest rates further this year. ECB official Joachim Nagel said rising oil prices were becoming increasingly important for monetary policy, while Chief Economist Philip Lane warned that another energy-price surge could keep inflation elevated for longer.
In the US, hawkish Fed comments and strong PMI data also lifted expectations for further rate hikes. Meanwhile, concerns over France’s public finances continued to weigh on sentiment, as the government struggles to rein in spending. 1% in 2025.