- German 10-year government borrowing costs rose to 3.21%, marking the highest level for the benchmark yield since 2011.
- Market participants are now fully pricing in two quarter-point interest rate hikes by the European Central Bank before the end of the year.
- The spike in yields is being driven by rising energy prices and intensifying expectations for persistent inflation ahead of the ECB's upcoming policy decision.
Quotes
“German bond yields rose to the highest level since 2011 as surging energy prices and mounting inflation expectations fueled bets on interest-rate hikes ahead of the European Central Bank’s decision later Thursday.”