France’s 10-year OAT yield held steady above 3.4%, near its highest level since mid-October, as investors focused on ongoing budget talks and the outlook for monetary policy following last week’s ECB and Fed meetings. Socialist Party leader Olivier Faure said his party will wait until the full 2026 budget is finalized before deciding whether to challenge France’s minority government, as Prime Minister Sébastien Lecornu works to pass the budget without invoking Article 49.3, which allows the government to bypass a parliamentary vote. To build support and avoid snap elections, Lecornu has offered several compromises, including pausing pension reforms and raising corporate taxes on large firms, though the center-left remains dissatisfied with the budget’s current state. On the policy front, the ECB kept rates unchanged for a third meeting, calling its stance “appropriate,” while Fed Chair Jerome Powell warned that rate cuts in December are “not a foregone conclusion.”
