FX.co ★ Global Bond Selloff Deepens on 2026 Rate Repricing

Global bond markets continued to decline as traders significantly reduced their projections for rate cuts in 2026 and even started to factor in the possibility of a rate hike by the European Central Bank (ECB) next year. The yield on Germany's 10-year Bund approached 2.9%, marking its highest point since March 2025. Meanwhile, the yield on the US 10-year Treasury rose above 4.2%, reaching a three-month peak. Yields on Japanese government bonds hit their highest levels since 2007, and UK 10-year gilt yields edged towards 4.6%. In Australia, the 10-year yield surpassed 4.8% for the first time since late 2023. Although the Federal Reserve is expected to cut rates today, an unsettled outlook on inflation, fiscal policies, and the broader monetary strategy has heightened market anxiety. Traders now foresee almost no further rate cuts from the ECB, following a string of assertive statements from policymakers. In both the UK and Australia, the prospect of rate reductions has waned in light of ongoing inflation concerns. Additionally, market predictions suggest a likely rate hike in Japan this month.