The yield on France's 10-year OAT is approaching 3.6%, marking its highest level since December 2022. This increase follows a 37-basis-point rise in 2025, as investors brace themselves for another year of substantial debt issuance, consequences from German fiscal stimulus, and persistent geopolitical uncertainties. Adjusting for the impact of European Central Bank activities, private investors are slated to shoulder a record net supply of €234 billion this year. Additionally, focus has shifted to the Netherlands’ occupational pension system—the European Union’s largest—which initiated its transition to a new framework starting January 1, allowing its nearly €2 trillion sector to diversify into riskier investments. On the domestic front, French lawmakers were unable to pass the 2026 budget in December, prompting Prime Minister Sébastien Lecornu to implement emergency measures to sustain government spending into January and prevent a shutdown. The comprehensive budget is now anticipated to be approved in early January.