NEWYORK
The 30-year French government bond yield climbed to 4.8558 percent, its highest level since September 2008, as investors repriced duration risk across developed sovereigns. France's 10-year yield reached 4.0516 percent—the highest since June 2009—while Germany's 10-year rose 1.5 basis points to 3.2138 percent, a level unseen since 2011.
The move reflects a decisive re-rating of European inflation expectations and central bank policy. Money markets now price an 85 percent probability of an ECB rate increase in September.
In the U.S. the 30-year Treasury yield climbed to 5.29 percent, its highest level since 2007. Long-end curve steepness has expanded as investors demand compensation for extended duration exposure during uncertainty over the Fed's terminal rate.
Japan's 10-year government bond yield reached 2.93 percent, the highest since September 1996, signaling market expectations for Bank of Japan tightening as early as September. Axel Rudolph, chief technical analyst at IG, said persistent yen weakness and inflation pressures strengthen the case for BOJ action. Japan's bond market is becoming less forgiving, he added, forcing the central bank to choose between supporting economic growth and containing inflation during proposed fiscal stimulus including a food tax cut.
Oil prices rose 6 percent last week, with Brent crude climbing further Monday as geopolitical tensions in the Middle East persist. The move adds to inflation expectations pricing into longer-duration debt across major economies.
