FX.co ★ French OAT Yields Dip on US-Iran Talk Hopes

France’s 10-year OAT yield slipped to 3.7% as investor sentiment improved on hopes for renewed US-Iran peace talks, with Pakistan positioning itself as a potential host for further negotiations. However, the most recent round of discussions in Islamabad collapsed, prompting the United States to impose a naval blockade on the Strait of Hormuz. Oil prices subsequently fell below $100 per barrel on expectations of a possible agreement and a reopening of the Strait, offering a temporary reprieve from inflation concerns. Even so, the OAT yield remains close to multi-year highs. Markets continue to anticipate a more hawkish European Central Bank, with at least two additional rate hikes priced in by the end of 2026 amid persistent inflation worries.