Selloff in euro zone bonds pauses but oil prices keep up pressure

The selloff in euro zone government bonds, which pushed yields to their highest in more than a decade, paused on Wednesday as the all-important U.S. Treasury market stabilised, although a rise in oil prices meant the relief was limited.

Germany's 10-year yield, the benchmark for the euro zone which hit a 15-year high on Tuesday as investors fretted about rising energy prices and government borrowing, fell ‌1 basis ⁠point (bp) to ⁠3.247%.

The country's 30-year yield was down 1 bp to 3.762% after also rising to its highest since ​2011 the previous day. Yields move inversely to prices.


Investors and analysts said a small rally in ​U.S. Treasuries, the dominant global bond market which influences the rest of the world, was helping sentiment. U.S. 10-year Treasury yields finished Tuesday 2 bps lower after rising to their highest ​since early 2025, in the wake of some weaker-than-expected house ⁠construction and industrial ‌production data. They were down a further 2 bps on Wednesday.

"Bond ​markets are ​showing tentative signs of stabilisation," said Hauke Siemssen, rates strategist at ⁠Commerzbank. "Nonetheless, yields have breached crucial levels."

Oil prices remained elevated, however, ​with Brent crude up 1% to $91.60, around its highest since late ​July. U.S. President Donald Trump said on Tuesday no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's assertion that the critical waterway remained closed and adding to the upward pressure on energy prices.

Longer-dated bonds, which tend to reflect expectations about the economy and government borrowing rather than central bank interest rates, ‌were at the epicentre of Tuesday's selloff. Analysts and investors said a rise in oil prices stoking inflation and high levels of government and ​AI "hyperscaler" borrowing were major ​concerns, while resilient economic ⁠growth was another factor pushing yields higher.

France's 30-year Treasury yield rose to its highest since 2008 above 4.9% but was last down 1 bp on Wednesday as the selling eased.

Siemssen ​said the rise in French yields relative to German stood out, "with the French budget season and next year's elections looming large".

The closely watched spread between the country's 10-year yields rose to its highest since October 2025 on Tuesday above 86 bps and was last at 85 bps. Germany is due to auction €6 billion ($7 billion) of 10-year bonds on Wednesday.