Euro zone bonds stabilise as France catches a break
TLT•Euro zone bonds stabilised Friday after a volatile week: French 10-year yields rose nearly 27 basis points, while German and Dutch yields fell 7 and 6 basis points. Markets priced an roughly 80% chance of an ECB rate rise by December.
1. Yields diverge
French 10-year yields fell 5 basis points on Friday to 5.04%, but were up nearly 27 basis points for the week, the biggest increase among major euro zone countries. Belgian yields rose nearly 19 basis points and Italian yields 11 basis points, while German and Dutch yields fell 7 and 6 basis points over the week.
2. ECB outlook
Markets priced a roughly 80% chance of an ECB rate rise by December. The ECB is expected to leave rates unchanged next week, with investors watching President Christine Lagarde’s comments on the outlook and stress in French bonds. A survey showed euro zone private-sector growth slowed to its weakest pace in four months in October.
3. Other bond markets
Yields on Japanese government bonds and US Treasuries fell 13 and 10 basis points this week, respectively, while Australian yields fell 4 basis points. The article said investors were focused on when AI builders and providers might see returns on their investments.
