German 10-year yield hits 15-year high ahead of ECB meeting
TLT•German yields rise ahead of ECB meeting
LONDON, July 23 (Reuters) - The German 10-year yield hit a 15-year peak on Thursday, and the 2-year was at a two-year high as traders bet that elevated oil and gas prices will cause the ECB to tighten policy more aggressively, a view the central bank could reinforce at its upcoming meeting.
The European Central Bank is all but certain to keep interest rates unchanged when it meets later on Thursday but will hold the door wide open to another rate hike in September, with oil prices back above $90 a barrel and gas up nearly 50% since the start of July. O/R EU/NG
Other euro zone yields also move higher
"One could argue for a front-loaded hike today, but over previous years the ECB has always fully telegraphed any policy moves in advance," said Michiel Tukker, senior rates strategist at ING.
"And with no hikes priced in by markets, deviating from this strategy seems unlikely."
Other euro zone yields were also on the rise, and those of more indebted nations were rising marginally more than Germany's.
France's 10-year yield gained 2 bps to 4.0%, its highest since 2009. FR10YT=RR
Italy's also rose 2 bps to 4.04%, though it still trades below its March highs. IT10YT=RR
(Reporting by Alun John; Editing by Toby Chopra)
Shorter-dated yields reflect policy expectations
Before that meeting, the German 2-year yield, which is highly sensitive to ECB policy, rose 4 basis points on the day to 2.88%, its highest since July 2024.
The 10-year yield, which also reflects traders' views of the longer-term outlook, was 2 bps higher at 3.20%, pushing through its May peak to its highest since 2011. DE10YT=RR
