France’s OAT Yields Rise on Geopolitical and Inflation Risks

France’s 10-year OAT yield increased to 3.72% after the Easter holiday, maintaining levels close to the multi-year highs seen at the end of last month, amid escalating Middle East tensions.

Investors are proceeding with caution, adopting a “wait-and-see” stance as they monitor US President Donald Trump’s ultimatum for Iran to reopen the Strait of Hormuz and agree to a ceasefire, or risk military retaliation.

Trump’s threat of large-scale strikes on Iranian infrastructure has pushed energy prices higher, leading markets to anticipate three interest rate hikes by the European Central Bank in 2026.

The pressure has been compounded by recent data revealing that Euro area inflation reached 2.5% in March, the highest level in over a year.