Government Bond Yields Soar Across Europe in July

Global government bond markets experienced a sell-off in July, with many regions recording significant increases in 10-year benchmark yields. European bonds led the charge, with Greece's 10-year yield rising by 40 basis points to end the month at 3.89%. Italy followed closely behind, up 36 basis points to 4%, while France and Ireland saw their yields increase by 32 and 30 basis points, respectively.

The European Central Bank left interest rates unchanged in July, but market participants are looking ahead to potential further rate hikes. The ECB's quarterly Survey of Professional Forecasters pointed to higher projected inflation and softer economic growth across some measures.

Roderick Joniaux, Head of European Government Bonds and Supranational Products at Tradeweb, noted that 'a great deal of uncertainty remains around geopolitical events and central bank moves'. He added that markets will be watching August and September for signs of future policy sentiment.