The yield on Germany's 10-year Bund climbed above 2.6% on Monday, marking its tenth consecutive increase and reaching its highest since June 2024.
German bund yield hits 2.6% on rate hike fears
This rise mirrored a global uptick in bond yields as markets responded to expectations of prolonged high interest rates from major central banks. Strong US labor market data supported recent hawkish remarks from FOMC members, pushing Treasury yields higher and intensifying selling pressure on government bonds linked to US credit markets. Meanwhile, surging European natural gas prices and supply uncertainties drove up energy service costs in the Eurozone, raising concerns about the ECB's ability to lower interest rates to support growth this year.
ECB survey raises rate forecast to 2.1%
Reflecting this, the ECB's survey showed rising inflation expectations, prompting markets to revise their forecast for the deposit rate to 2.1% by July 2025.
