European Sovereign Debt Pressured as Traders Price in Further ECB Rate Hikes

Germany's policy-sensitive two-year Schatz yield surged to a new high since late 2023, reflecting mounting expectations that global central banks, including the European Central Bank (ECB), will implement successive interest rate increases to combat energy-driven inflation. Long-duration paper saw a modest reprieve after days of heavy selling, with Germany's benchmark 10-year Bund yield easing slightly from its highest level since 2009.