Global bond selloff deepens on 2026 rate repricing

Global bond markets extended their slide as traders sharply scaled back expectations for 2026 rate cuts and even began to price the possibility of an ECB rate hike next year.

Germany’s 10-year Bund yield climbed toward 2.9%, its highest level since March 2025, while the US 10-year Treasury yield surged above 4.2%, a three-month high.

Japanese government bond yields reached their highest levels since 2007, and UK 10-year gilt yields jumped toward 4.6%.

In Australia, the 10-year yield broke above 4.8% for the first time since late 2023.

The Fed is expected to cut rates today, but a less comforting outlook on inflation, fiscal policy, and the broader monetary path has intensified market nerves.

Traders now anticipate virtually no additional rate cuts from the ECB after a series of hawkish comments from policymakers.

In the UK and Australia, expectations for easing have also diminished amid persistent inflation concerns. Elsewhere, markets price in a likely rate hike in Japan this month.