Bond Market Volatility Drives Global Currency Shifts

The global bond market remained highly volatile last week as concerns over France's fiscal outlook drove a sovereign bond sell-off across Europe.

The US Treasury yield hit a fresh 24-year high near 5.34% before retracing sharply, while the most actively traded Brent crude contract gained almost 4% to above $100 per barrel.

As a result of this volatility and higher energy prices, risk-sensitive assets took a hit, with European markets experiencing large falls and the US dollar strengthening against major currencies.

The NZD broke below its previous 2026 low near 0.5625, extending its decline towards 0.5600 as the US dollar gained against most G10 currencies, driven by demand for safe-haven assets following the sell-off in European bonds.