France Sells 10-Year Debt at Record Yield Before ECB Decision

France’s cost of borrowing for 10 years tumbled to a record low before the European Central Bank’s interest-rate decision today.

The treasury sold 4.02 billion euros ($5.3 billion) of 2023 debt at an average yield of 1.81 percent, less than the previous record of 1.94 percent set a month ago. It also sold 990 million euros of 2032 bonds and 2.92 billion euros of 2021 bonds.

The record-low borrowing costs come as ECB President Mario Draghi is expected to react to plunging European inflation and economic confidence by trimming the central bank’s benchmark rate by a quarter-point to a record low of 0.5 percent, according to 44 out of 70 economists in a Bloomberg News survey.

“An interest rate cut makes sense,” Tobias Blattner and Emily Nicol, economists at Daiwa Capital Markets in London, said in a note to clients. “By cutting its refinancing rate, the ECB would send a strong signal that rates will stay at record low levels for some time to come.”

In France, the euro area’s second-largest economy, jobless claims have jumped to a record high of 3.22 million, while the consumer price index has dropped for seven straight months.

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