FX.co ★ French Bond Yields Surge Amid Political, Oil Market Turmoil

France’s 10-year OAT yield rose above 3.75%, its highest level since May 19, as investors reacted to mounting political uncertainty and a renewed surge in oil prices. Far-right leader Marine Le Pen confirmed she will run for president for a fourth time, even after a court ordered her to wear an electronic monitoring device following an appeals panel’s decision to uphold her conviction for misusing public funds. Polls currently place her National Rally party in the lead, with its candidate expected to reach the second-round runoff. At the same time, uncertainty is deepening over who will emerge as the main contender to succeed President Emmanuel Macron, who has not yet anointed a clear successor.

Oil prices climbed back above $75 per barrel after a fresh round of strikes between the US and Iran, intensifying concerns about inflation. In response, traders are now pricing in roughly 30 basis points of additional ECB tightening this year—equivalent to at least one more rate hike, potentially as early as September.