Eurozone yields drop as Fed hike eases duration pressures

Eurozone government bond yields declined on Friday, marking the first weekly retreat in six weeks, as market participants reassessed risk appetites following the U.S. Federal Reserve’s 25-basis-point rate hike to a 3.75%–4.00% range. German 10-year Bund yields settled around 3.49%, having peaked near 3.54% on Tuesday—a level not seen since 2021—while Italy’s 10-year BTP yields held steady at 4.35% and France’s 10-year OAT yields remained near 4.45%. Meanwhile, U.S. Treasury 10-year yields briefly breached the 5.00% threshold during Tuesday’s sell-off, reflecting heightened duration risk before stabilizing in response to the Fed’s decision.