Euro bond yields edge lower as market weighs inflation and rate hike outlook

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智通财经2026/11/12 10:06

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According to institutional reports, Eurozone government bond yields edged lower on Thursday as investors took a breather, following heightened inflation concerns and rising rate hike expectations in the US and Europe earlier this week.
The yield on Germany’s 10-year government bond, the Eurozone benchmark, fell 1.6 basis points on the day to 3.3077%. However, following four consecutive weeks of decline, it is still expected to rise by about 5 basis points this week.
US consumer inflation data released on Tuesday came in higher than expected, pushing up US Treasury yields and prompting traders to increase their bets on a Federal Reserve rate hike, with the impact also rippling into Europe on Tuesday before stabilizing in the next session. With the US bond market closed on Wednesday for Veterans Day, global bond trading was relatively subdued.
Commerzbank interest rate strategist Erik Lim said that with US investors returning on Thursday, market activity may pick up again, and comments from Federal Reserve officials remain in focus. He said that if they make further hawkish remarks, it will be worth watching how this affects expectations for ECB interest rates.
Earlier this week, Federal Reserve policymakers issued warnings about inflation and opened the door to a faster pace of rate hikes. Federal Reserve Governor Waller also mentioned that a 50 basis point hike is possible at the December meeting, although money markets have recently considered this likelihood as still relatively low.
The European Central Bank is also expected to raise rates in December, with money markets currently pricing in about an 80% probability of a 25 basis point hike, and fully pricing in two 25 basis point hikes by the middle of 2027.
The yield on Germany’s two-year government bond, which is more sensitive to interest rate expectations, recently fell 1.4 basis points to 3.1091%. After four consecutive weeks of decline, it is set to rise by nearly 13 basis points this week.

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Euro bond yields edge lower as market weighs inflation and rate hike outlook

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