Europe's Bond Markets Take a Breather as Energy Inflation Bites

European sovereign debt markets paused on Monday after a relentless sell-off drove benchmark yields through major milestones last week. The Bund, which serves as the benchmark for the single-currency bloc, was virtually unchanged at 3.624%.

The pause comes after German borrowing costs capped a seventh consecutive weekly advance, marking their longest stretch of weekly gains since 2022 due to persistent energy cost pressures and hawkish central bank guidance.

At the policy-sensitive short end of the curve, the short Bund was similarly steady at 3.310%, holding just short of its peak levels from 2023.