France’s 10-year OAT yield rose above 4.10%, its highest level since October 2008, as a global fixed-income selloff pushed sovereign borrowing costs higher. The move was driven in part by rising oil prices after the expiry of the US-Iran ceasefire and Tehran’s threat to take a more aggressive military stance, which revived inflation concerns. France is also under added scrutiny because of its deteriorating public finances: interest payments totaled €34.5 billion in the first half of the year, up 19% from a year earlier, and public debt stands at around 118% of GDP. Even if the government keeps this year’s budget deficit near its roughly 5% of GDP target, debt is still expected to rise further over the coming years. The backdrop is complicated by diverging policy expectations, with softer US economic data easing bets on near-term Federal Reserve tightening while investors increasingly expect a more hawkish path for European monetary policy.