Eurozone yields climb ahead of data-packed week
The German two-year bond yield, more sensitive to eurozone rate expectations, rises three basis points to 2.173%
EUROZONE government bond yields reached fresh multi-week highs on Monday (Oct 28), tracking moves in US Treasuries ahead of a data-packed week and in the final run-up to the US presidential election.
Germany’s 10-year bond yield rose five basis points to 2.338 per cent – the highest in more than three weeks.
US 10-year bond yields climbed five basis points to 4.2881 per cent, near late-July highs as investors have increasingly bet on a less dovish US Federal Reserve buoyed by recent strong economic data.
As the presidential election nears, markets have been pricing in a growing chance that Republican Party candidate Donald Trump will return to the White House, along with a Republican majority in the US Congress.
Trump’s potential policies, such as tariffs, have been seen as inflationary, boosting the US dollar and fuelling a rise in US Treasury yields.
The German two-year bond yield, which is more sensitive to eurozone rate expectations, rose three basis points to 2.173 per cent.
Meanwhile, a spate of key economic data this week could shape the rate path on both sides of the Atlantic. This includes the eurozone third-quarter gross domestic product report, inflation readings and the US jobs report on Friday.
A survey on Friday that showed improvement in German business morale in October after four months of decline, offered some respite to Europe’s largest economy and sent bond yields higher.
Italy’s 10-year government bond yield rose 4.5 basis points to 3.551 per cent, with the gap between Italian and German yields at 120.95 basis points. REUTERS
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