Euro zone yields retreat from peaks after bruising month
TLT•Euro zone yields dipped on Wednesday after reaching peaks earlier in the week, while September brought sharp increases in borrowing costs. Germany’s 10-year yield fell 4 basis points to 3.57%; France’s dropped 3 basis points to 4.78% and Italy’s fell 6 basis points to 4.57%.
1. Yields ease Wednesday
Germany’s 10-year yield fell 4 basis points to 3.57%, retreating from 3.65% on Monday, its highest since 2009. France’s 10-year yield dropped 3 basis points to 4.78%, while Italy’s fell 6 basis points to 4.57%.
2. September rises persist
Despite Wednesday’s declines, Germany’s 10-year yield rose 27 basis points in September. France’s increased more than 60 basis points, its biggest monthly jump since December 2022, and Italy’s climbed 43 basis points. Energy costs and inflation fears, along with stronger growth expectations linked to the artificial intelligence boom, had helped push yields higher.
3. Policy signals and data
Markets became more cautious about rate hikes after energy prices fell and central bankers pushed back against bets on rapid, sustained increases. European Central Bank policymaker Peter Kazimir said the ECB had time to be flexible. German, French and Italian inflation data and US PCE inflation were due Wednesday.
