In the wake of recent decisions by the Federal Reserve and the Bank of England, long-dated euro zone government bond yields surged on Friday, marking a week of volatility. Germany’s 30-year bond yield rose modestly, influenced by the government’s announcement of increased debt issuance.
Germany plans to augment its fourth-quarter issuance by 15 billion euros, a move driven by heightened infrastructure and defense spending. This has fed into investor anxiety, causing a sell-off in longer-dated bonds and a subsequent rise in yields, which experts refer to as curve steepening.
Across the Atlantic, U.S. Treasury yields also climbed following a better-than-expected jobs report, stoking investor concern around the labor market’s strength. Meanwhile, the Bank of Japan maintained its short-term rates, opting to initiate ETF holdings sales despite mixed opinions within its ranks.
(With inputs from agencies.)
