Euro zone bond yields hover near 2-month highs

Germany's 10-year Bund yield was a touch lower on the day at -0.14%, having briefly touched a new two-month high in early trade at around -0.12%. "Bond markets haven't been able to catch a bid since the holiday season began and yesterday's sell-off in U.S. Treasuries serves as a foretaste of what could follow in a year of elevated inflation and prospective monetary tightening," said Michael Leister, head of interest rates strategy at Commerzbank.

Ten-year bond yields in the euro area hovered near their highest levels in around two months on Tuesday, a day after a surge in U.S. Treasury yields kept bond investors on edge over rising inflation and tighter monetary policy. U.S. 10-year Treasury yields jumped 12 basis points on Monday, while two-year yields surged to their highest levels since March 2020 when the coronavirus pandemic first sparked turmoil across world markets .

U.S. and European bond yields were on steadier ground as London markets reopened after Monday's holiday, but yields held close to their highs. Germany's 10-year Bund yield was a touch lower on the day at -0.14%, having briefly touched a new two-month high in early trade at around -0.12%.

"Bond markets haven't been able to catch a bid since the holiday season began and yesterday's sell-off in U.S. Treasuries serves as a foretaste of what could follow in a year of elevated inflation and prospective monetary tightening," said Michael Leister, head of interest rates strategy at Commerzbank. Italian 10-year yields also touched a two-month high, rising to almost 1.23% in early trade.

Yields were broadly higher across the Italian curve as investors also anticipated new supply in a month typically busy for European bond issuers. Italy is expected to announce shortly the sale of a BTP bond with a maturity of between 15 and 30 years, two market sources said on Monday. Germany, the euro area's benchmark bond issuer, is expected to sell two-year bonds later this session.

Data meanwhile showed France's European Union-harmonised consumer price index rose 3.4% in December from a year earlier.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)