FX.co ★ French Bond Yield Hits 14-Year High as Iran War Fuels ECB Hike Bets

France’s 10-year OAT yield climbed to 3.67%, returning to its highest level since November 2011, as markets braced for further ECB rate hikes ahead of today’s decision. The escalating US-Israeli conflict with Iran has driven energy prices sharply higher, dashing earlier expectations of rate cuts and reigniting inflation worries. Investors now anticipate more than 55 basis points of ECB tightening by year-end—equivalent to at least two 25-basis-point hikes—with the first increase fully priced in for June, marking a sharp reversal from pre-war expectations of possible easing.