FX.co ★ German Bund Yields Surge

Germany's 10-year Bund yield has surpassed 2.8% for the first time since March 2025, with the 30-year yield reaching its highest point since 2011. This trend reflects a global weakening of longer-dated bonds, driven by concerns over fiscal sustainability. Several factors contributed to this rise: a stronger-than-expected surge in German industrial output, hawkish remarks from a European Central Bank official, and a notable increase in Japanese bond yields. Recently, German legislators gave the green light to the nation's €524 billion federal budget for 2026 after protracted political discussions, which included nearly €180 billion in borrowed finances. In contrast, France is grappling with its 2026 budget, as parliament prepares to vote on the social security section amidst broader budgetary debates. Furthermore, ECB official Isabel Schnabel expressed her comfort with market speculations that the central bank's forthcoming move might be a rate hike. Simultaneously, in Japan, bond yields have hit multi-year peaks as expectations rise that the Bank of Japan may increase interest rates next week.