The yield on the German 10-year Bund rose past 2.6% on Monday, a tenth straight increase to test its highest level since June 2024, tracking a rise in bond yields across the globe as markets react to expectations of high interest rates from major central banks. Fresh data pointing to a strong US labor market backed recent hawkish signals from FOMC members, lifting Treasury yields and amplifying selling pressure for government bonds with exposure to US credit markets. At the same time, soaring European natural gas prices amid its uncertain supply lifted energy services costs in the Eurozone and raised concerns that the ECB will have limited room to cut interest rates to support growth this year. Consequently, the ECB's survey indicated rising inflation expectations, leading markets to increase their forecast for the deposit rate to 2.1% by July 2025.
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