The 10-year French OAT-German Bund yield spread widened to 130 basis points, its highest level since 2012, as markets brace for France’s upcoming budget presentation. Eurozone bond yields rose alongside U.S. Treasury yields, with Spain and France set to auction significant debt supply. Commerzbank’s Erik Liem noted that OAT spread dynamics remain concerning amid choppy conditions.
Meanwhile, U.S. Treasury yields hovered near 5.278%, with some analysts like Siebert Financial’s Mark Malek viewing high yields as both a warning and an opportunity for new investors. Jefferies’ Mohit Kumar expressed uncertainty over near-term yield direction but doubted central banks would deliver the full extent of rate hikes currently priced in—93 basis points over the next 12 months per LSEG data. Swissquote’s Ipek Ozkardeskaya highlighted asymmetric return potential in U.S. Treasurys at current yields, while Tickmill Group’s Patrick Munnelly observed a tug-of-war between tech earnings momentum and rising bond yields.
Investors are now focused on Friday’s U.S. nonfarm payrolls report.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing