FX.co ★ France 10-Year OAT Yields Edge Up on Geopolitical Concerns

France’s 10-year OAT yield experienced a slight recovery, reaching approximately 3.53%, up from 3.48% on January 21. This movement reflects investor unease amidst escalating geopolitical tensions. At the World Economic Forum in Davos, US President Trump reiterated the United States' interest in Greenland, making it clear that military intervention would not be considered to procure the island. However, previous threats of tariffs directed at European nations concerning Greenland had already unsettled markets and intensified risk aversion. Consequently, the European Parliament’s Trade Committee has deferred the approval of the US–EU trade agreement indefinitely, emphasizing that significant progress is unlikely until the US discontinues such threats and adopts a more collaborative approach. On the domestic front, France's 2026 national budget awaits a routine parliamentary vote. The government has employed Article 49.3 of the French Constitution to advance parts of the budget and has sent it to the Senate for further consideration, leaving its comprehensive approval in question.