Euro zone bond yields jump as US 10-year yields scale 15-year highs
bond yields across the euro area rose sharply on Monday as benchmark U.S. 10-year Treasury yields climbed to fresh 15-year highs on a view that interest rates will remain higher for longer than initially anticipated.
That eclipsed some soft German data and demand for safe-haven assets due to concerns about China's economy.
Bond prices move inversely with yields.
The 10-year U.S.
Treasury yield rose to as high as 4.35%, exacerbating upward pressure on euro zone bond yields.
In late trade, the 10-year German Bund yield was up 8 basis points (bps) on the day at 2.7%. It hit 2.729% last week, the highest level since early March, when it reached 2.77%, the highest in more than 12 years.
Italy's 10-year yield was 7 bps higher at 4.39%.
Data released earlier on Monday showed German producer prices fell more than expected in July, with the decline due primarily to lower energy prices.
Focus in world markets was on China, which delivered a smaller cut to lending rates than markets had counted on, continuing Beijing's run of frugal stimulus steps.
«The narrative of economic resilience pushing up rates emanates from the U.S., where real rates have led the drive higher,» ING analysts said in a note to clients.
«There will be little to further that story, given the very few data releases lined up for this week.»
Citi analysts said the Bund yield was unlikely to break above year-to-date highs as the European Central Bank (ECB) «is either at or near a policy peak» and «the euro PMIs are already softer with rising worries over growth in China.»
The flash composite Purchasing Managers' Index (PMI) for the bloc, compiled by S&P Global and seen as a good gauge of overall economic health, is due on Wednesday.
U.S.
