France’s 10-year OAT yield fell to 4.76%, its lowest level in nearly a week, tracking broader declines across European bond markets amid a global flight to safety following an equity sell-off driven by AI-related concerns, persistent inflationary pressures, high interest rates and elevated oil prices. Despite the latest decline, French borrowing costs remain near their highest levels in more than two decades, as record public debt and political hurdles complicate efforts to consolidate public finances. The government aims to reduce the budget deficit to 5% of GDP by 2027, but parliamentary support for substantial spending cuts remains uncertain ahead of next year’s presidential election. ECB President Lagarde played down speculation about central bank intervention in France’s widening budget crisis, stressing that “the primary and first solution lies at home in France, and it has to do with fiscal policies”. Meanwhile, the ECB is expected to deliver another rate hike in December.