French 10-year government bond yield rises to 3.6%, reaching a new high since November 2011.

The yield on France's 10-year government bonds has risen to 3.6%, continuing last week's upward trend and reaching the highest level since November 2011. The hawkish stance of the European Central Bank and concerns about France's public finances have dampened market sentiment. Last week, the European Central Bank maintained interest rates unchanged for the fourth consecutive time and hinted that borrowing costs may remain at current levels for a while, while also noting that the euro area has weathered the impact of US tariffs better than expected. At the same time, the Bank of France raised its forecast for GDP growth, expecting growth of 0.9% in 2025 and 1.0% in 2026, while maintaining moderate inflation expectations. On the fiscal front, lawmakers failed to approve the 2026 budget at a joint committee meeting on Friday, forcing the government to seek emergency legislation to extend the 2025 budget. Prime Minister Sebastien Lecornu expressed regret that parliament could not vote on the budget before December 31st.