Euro Zone Yields Hit Near Two-Decade Highs Amid Inflation Fears

The euro zone government bond selloff continued on Wednesday, with yields reaching nearly two-decade highs. Germany's 10-year yield hit a fresh 15-year high of 3.275%, while French 10-year yields rose to their highest since 2008 above 4.13%. Italian 10-year yields also reached their highest since March at over 4.1%.

Oil prices rose again on Wednesday, contributing to inflationary pressures that could force central banks to raise interest rates. Brent crude oil hit its highest since late July at $92.38 a barrel. Investors are concerned about debt sustainability and the impact of high government borrowing and 'hyperscaler' borrowing.

'Investors are very concerned regarding debt sustainability of sovereigns around the globe, especially developed markets,' said Michael Weidner, co-head of global fixed income at Lazard Asset Management. He attributed the selloff to thinner market liquidity during the summer and a rise in oil prices stoking inflation.