European Bond Yields Soar to Multi-Year Highs Amid Energy Price Concerns

The European government bond yields continued to rise on February 14th, with Germany's benchmark 10-year bund yield reaching its highest level in approximately 17 years, since mid-2009. The UK 10-year gilt yields also hit levels not seen since 2007.

Rising energy prices have intensified concerns about resurgent inflation, putting upward pressure on yields across European markets. The benchmark German 10-year bund yield was trading at around 3.5% as of 4:00 p.m. UK time, approximately 0.03 percentage points higher than the previous week's close.

The prior week had already seen a rise of more than 16 basis points (bp), marking the largest weekly increase since early March. French long-term yields also climbed, briefly reaching the 4.5% range, the highest level since 2008.