France’s 10-year OAT yield held near 3.50%, close to its lowest level since December 3, as investors monitored ongoing 2026 budget negotiations amid renewed concerns over the US Federal Reserve’s independence. Political uncertainty has increased following calls by the far-right National Rally and leftist France Unbowed for confidence votes over the EU–Mercosur trade deal. Some near-term pressure eased, however, after the Socialist Party said it would not support the motions, though the budget minister warned that a government collapse next week could push the finance bill’s adoption past March’s municipal elections. In the US, the Justice Department’s subpoena of the Federal Reserve over headquarters cost overruns has heightened market unease about the central bank’s independence. Investors are also awaiting US inflation data due Tuesday for further clues on the monetary policy outlook.
