France’s 10-Year Yield Holds Above 3.2% as ECB Signals Cautious Path Forward

France’s 10-year OAT yield remained above 3.2% as markets digested recent comments from European Central Bank officials regarding the future direction of monetary policy, while also awaiting clarity on a potential framework to revive the US-China trade truce.

ECB Governing Council member François Villeroy de Galhau reiterated that the central bank stands ready to move swiftly on rates if needed, even after delivering an eighth straight cut—a series he said had effectively "normalized" policy.

Although last week’s rate cut was in line with expectations, ECB President Christine Lagarde hinted that the easing cycle may be drawing to a close.

The deposit facility rate now sits at 2%, following a decline in Eurozone inflation to 1.9% in May 2025.

At the same time, the bloc’s economy posted a robust 0.6% growth in Q1 2025, its fastest quarterly pace since the third quarter of 2022.