Europe Sees Bond Relief as US Mortgage Rates Hit a High

The European bond market saw some relief on Friday morning as yields eased after a sharp sell-off. The yield on France's 10-year OAT was trading around 4.67%, down from 4.7% earlier, while Germany's 10-year Bund was at 3.59%, down from 3.61%. This move reflects concerns about France's debt and election risks, which were amplified by ratings agency Scope's downgrade of France.

Investors are also weighing the risk of a 2027 presidential run-off between the far right and the far left in France. The cost of insuring French debt against default has climbed to its highest in nearly a decade.

The bigger story was in the US, where the 30-year Treasury yield reached its highest level since 2004 at around 5.5%. This has compounded worries over persistent inflation and swelling government debt.