Euro zone yields rise, echoing dramatic move in Treasuries
TLT•Euro zone bond yields rose after hotter-than-expected U.S. inflation data pushed Treasury yields higher. Germany’s two-year yield rose 6 basis points to 3.07%, while its 10-year yield gained 3 basis points to 3.30%.
1. Yields reverse higher
Euro zone bond yields rose after U.S. consumer prices increased 0.4% in October, more than expected, lifting Treasury yields and reversing earlier declines in European trading. Germany’s two-year yield jumped 6 basis points to 3.07%, and its 10-year yield climbed 3 basis points to 3.30%.
2. Rate hike bets shift
The U.S. two-year yield rose 16 basis points, while the 10-year Treasury yield gained 12 basis points to 4.99%. Money markets fully priced a 25-basis-point Federal Reserve rate hike in December and saw around a 15% chance of a larger move. Traders saw around a 75% chance of a European Central Bank hike next month, up from 66% on Monday.
3. Other yields rise
France’s 10-year yield rose 4 basis points to 4.78%, reversing an earlier decline of around 6 basis points. Italy’s 10-year yield also rose 4 basis points, to 4.35%.
