FX.co ★ France OATs Hit Two-and-a-Half-Month High

France's 10-year OAT yield has approached approximately 3.5%, nearing its peak since late September, amid a global uptick in bond markets and ongoing uncertainty about the 2026 budget. The country grapples with finalizing this budget: while the National Assembly ratified the social security tax component on December 5, the comprehensive social security budget bill is slated for a vote on Tuesday. Olivier Faure, the Socialist Party leader, has confirmed that his party will back the bill in parliament. On the economic horizon, Finance Minister Roland Lescure has forecasted a growth rate of at least 0.8% for 2025, slightly surpassing the government's earlier estimate of 0.7%. In parallel developments, ECB policymaker Isabel Schnabel has suggested that an interest rate increase might be the central bank's forthcoming decision, citing ongoing growth and inflation risks that appear skewed to the upside. In a similar vein, Japanese government bond yields have risen to levels not seen for several years, driven by expectations of interest rate hikes and continued high debt burdens.