European Bond Yields Surge to 15-Year Highs Amid Global Sell-Off

European government bond yields have surged to their highest levels in over 15 years as a renewed sell-off in global bond markets deepens. The global bond rout has pushed Germany's benchmark borrowing costs to a 15-year high, with France, Italy, and the Netherlands also seeing steep rises.

The German 10-year Bund climbed above 3.36% on Tuesday before falling back to around 3.34%, while the yield on Germany's 30-year Bund surged above 3.84%, its highest level since 2011. France's 10-year OAT yield rose to its highest level since November 2008, trading slightly above 4.215%.

The Dutch 10-year government bond yield increased to 3.43%, its highest level since May 2011, while Spain's 10-year yield climbed above 3.80%, its highest level since November 2023. The sell-off has also spread to Asia, where Japan's benchmark 10-year government bond yield reached 3.00% for the first time since 1996.

Investors are concerned that rising energy prices will fuel inflation around the world, potentially prompting interest-rate increases by central banks in the US, Japan, and the eurozone. The ECB is due to hold its next monetary policy meeting next week, with most investors betting on a 25-basis-point rate hike.