Higher-for-longer rates keep euro zone yields near multi-year highs
Euro zone government bond yields held near multi-year highs on Tuesday as the narrative that global central banks would keep interest rates «higher for longer» continued to drive price action.
Italy is also under growing market scrutiny as Prime Minister Giorgia Meloni is set to announce a new budget against the backdrop of a weakening growth outlook.
Reuters earlier reported that Italy is likely to raise its 2024 budget deficit target to between 4.1% and 4.3% of gross domestic product, however, the fiscal gap is seen below 4% of GDP under current trends, allowing leeway for several billion euros to fund measures in the upcoming budget.
Germany's 10-year government bond yield, the euro area's benchmark, was last flat at 2.788%, having briefly hit a 12-year high of 2.813% in early trade. Bonds yields move inversely with prices.
Italy's 10-year yield was last up 4.4 bps at 4.697%, after hitting its highest level since October.
