Euro zone bond yields at multi-year highs after ECB hikes interest rates
TLT•Markets react modestly to ECB outlook
Meanwhile, the euro EUR=EBS dipped very slightly to trade 0.2% lower at $1.161. Europe's continent-wide STOXX 600 equity index .STOXX also fell marginally and was down 0.4%.
The ECB lifted its 2026 economic growth projection to 0.9% from 0.8% seen in June and now sees inflation averaging 3% this year.
German yields reach highest since 2011
Germany's 10-year bond yield DE10YT=RR, the benchmark for the bloc, was last up 2 basis points (bps) at 3.457%, its highest since 2011, with rising oil prices exerting upward pressure on borrowing costs.
The 2-year yield DE2YT=RR, which is more sensitive to rate expectations, rose a touch and was last up 2 bps at 3.071% as traders nudged up their bets on further rate hikes in the next six months.
Euro zone bond yields rise after ECB decision
Euro zone bond yields hit multi-year highs on Thursday, rising slightly after the European Central Bank raised interest rates as anticipated and said the risks remained skewed towards higher inflation.
The ECB hiked rates to 2.5%, from 2.25%, as it seeks to ensure a rise in energy prices stemming from the U.S.-Iran war does not spread through the euro zone economy.
