Germany: French OAT Yields Ease as ECB Hike Bets Retreat.

France’s 10-year OAT yield slipped to just below 4.5%, down from a near 18-year high of 4.55% touched on Tuesday, as traders scaled back expectations for further ECB rate hikes despite the Federal Reserve’s more restrictive tone. Some analysts argued that markets had gone too far in pricing ECB tightening, noting that elevated energy prices could weigh on growth and ultimately ease inflationary pressures. Brent crude also fell for a third consecutive session as concerns over Saudi supply disruptions receded. Meanwhile, Prime Minister Sebastien Lecornu is racing to finalize a deficit-reduction budget for 2027 as pressure from bond markets mounts and voters face a rising cost of living. Money markets now price the ECB deposit rate at just below 2.9% by December, implying roughly a 50% chance of a second hike this year.