Bond markets showed tentative signs of stabilization on Wednesday, with benchmark yields easing from multi-year highs driven by concerns over escalating sovereign debt levels.
The yield on Germany’s 10-year Bund, the eurozone’s benchmark, fell by one basis point to 3.247%, after reaching a 15-year peak a day earlier. Bond yields move inversely to prices. A modest recovery in U.S. Treasuries provided support, with 10-year U.S. yields declining by two basis points on Tuesday following weaker-than-expected U.S. economic data, and falling another two basis points on Wednesday.
Commerzbank interest-rate strategist Hauke Siemssen noted the markets were stabilizing but emphasized that key thresholds had been breached. Analysts highlighted elevated borrowing by governments and hyperscalers—large cloud providers—as primary factors behind the surge in yields. France’s 30-year sovereign bonds briefly traded at levels not seen since 2008 before easing by one basis point on Wednesday.
The spread between French and German 10-year bonds widened to its highest since October 2025 on Tuesday, peaking at over 86 basis points, before narrowing slightly to 85 basis points on Wednesday. Siemssen attributed the elevated spread to France’s upcoming budget debate and 2025 elections, which have heightened fiscal risk perceptions.
