Government bond yields across Europe rose again on Monday, with France’s 10-year yield briefly climbing above 4.5% and Belgium’s reaching its highest level since early 2012.
By Monday afternoon, Belgium’s 10-year yield stood at 4.14%. German government bond yields also moved higher, with the 10-year yield rising to 3.53%.
That left the spread between French and German 10-year bonds at almost 1 percentage point, a closely watched indicator in European bond markets.
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The rise in yields has been driven by a sustained sell-off in bond markets. Investors are concerned that inflation could accelerate further as the war in the Middle East intensifies and oil prices continue to rise sharply. That has fuelled expectations that central banks may be forced to raise interest rates further, making investors less willing to lock up their money for longer periods.
