France’s 10-year OAT yield rose to 3.67%, returning to its highest level since November 2011, as markets brace for ECB rate hikes ahead of today’s decision. The escalating US-Israeli conflict with Iran has sent energy prices surging, dashing earlier hopes of rate cuts and reviving inflation concerns. Investors now expect over 55 basis points of ECB tightening by year-end, equivalent to at least two quarter-point hikes, with the first increase fully priced in by June, a dramatic reversal from pre-war expectations of potential easing.
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