France’s 10-year OAT yield held steady around 3.6% as investors absorbed fresh European inflation data. Preliminary figures showed France’s EU-harmonized consumer price index, a key gauge for the European Central Bank, rose 0.7% year on year, marking the weakest reading since May and below market expectations of 0.8%. Meanwhile, regional German CPI data indicated a slowdown in inflationary pressures in Europe’s largest economy. Looking ahead to 2026, market participants are preparing for a record year of borrowing, with the French treasury planning to issue €310 billion in debt. The government begins the year without a fully approved budget after lawmakers failed to pass the 2026 finance bill in December. To maintain state funding, authorities have invoked a special emergency budget law, temporarily rolling over the previous year’s budget until a new bill is adopted.
