France’s 10-year OAT yield climbed to near 3.40%, the highest since late October 2023, reflecting broader trends across Europe amid growing inflation concerns and political instability. Eurozone inflation accelerated in December for the second straight month, driven by rising energy prices and the cost of services, challenging the ECB’s delicate task of fostering growth while keeping inflation in check. This, combined with the central bank's survey showing elevated inflation expectations, has left traders wary of potential shifts in monetary policy. National data showed mixed results, with inflation exceeding expectations in Germany and Spain, while France and Italy saw more moderate increases. Meanwhile, uncertainty persists around the potential impact of US President Donald Trump’s proposed tariffs. Political turmoil also continued in France as the government missed its 2025 budget deadline, prompting President Macron to appoint François Bayrou as his fourth prime minister of 2024.