French 10-year OAT yield fell below 4.5%, retreating from last week’s 18-year highs as oil prices continued to fall amid tentative signs of easing geopolitical tensions and stronger regional supply. Meanwhile, concerns over the country’s finances intensified after Scope Ratings downgraded the country to A+ from AA-, citing rising debt, persistent deficits and limited progress on structural reforms. Morningstar DBRS also shifted its outlook on France’s AA rating to negative. The warnings come as the government struggles to rein in spending, with the budget deficit now expected to widen to 5.4% of GDP this year, from 5.1% in 2025. French bond spreads have already widened sharply, with the 10-year OAT-Bund premium briefly exceeding 100 basis points for the first time in 14 years. Political uncertainty ahead of next year’s presidential election is further complicating efforts to secure support for the government’s planned fiscal consolidation.