Euro zone bonds join global selloff, yields hit multi-year highs
TLT•Long-end worries deepen over borrowing and spending
Concerns over the fiscal outlook tend to weigh more heavily on longer-dated bonds, where prices are more sensitive to shifts in long-term borrowing, inflation and debt sustainability expectations.
Those concerns have been amplified by fears that a prolonged Iran war could lead governments to ramp up spending to cushion the economic impact of energy supply disruptions from the Middle East, while the deteriorating geopolitical backdrop is also driving higher military expenditure.
"Markets are clearly demanding more compensation for locking up capital for very long periods," said Kjersti Haugland, chief economist at DNB Carnegie.
"Future financing needs, and therefore also the supply of government bonds, are substantial, reflecting ageing, rearmament and a greater need for supply security in a world marked by rising geopolitical conflict and unrest."
Germany's 30-year yield DE30YT=RR rose 2 bps to 3.7663%, its highest since July 2011.
Euro zone yields rise as global bond selloff deepens
LONDON, Aug 18 (Reuters) - Euro zone bond yields hit multi-year highs on Tuesday, joining a global fixed-income selloff, as fading hopes for a swift end to the war in Iran drove oil prices higher and fuelled inflation concerns.
Long-standing concerns about fiscal stability in countries such as France, Japan, the UK and the United States also weighed on global bonds, even as recent soft U.S. data have prompted markets to trim their expectations for rate hikes from the Federal Reserve.
Germany and France benchmark yields hit decade-plus highs
Germany's 10-year yield DE10YT=RR, the benchmark for the euro zone, was last up 3 basis points at 3.2478%, its highest level since May 2011. Bond yields move inversely with prices.
