Global Bond Yields Edge Higher on Slowing Bond Selloff — 2nd Update

By Emese Bartha and Paulo Trevisani

U.S. and European yields rose Friday, but stayed below recent highs as the global bonds selloff eased.

Well-received 10-year and 30-year bond auctions in the U.S. indicated prices, which move in the opposite direction of yields, may have become cheap enough to attract buyers.

"It's been a good week for U.S. bond auctions," ING's Padhraic Garvey, regional head of research for the Americas, and Benjamin Schroeder, senior rates strategist, said in a note. "Solid 10-year and 30-year auctions over consecutive days show there is a level where buyers step in."

Markets will be watching inflation data next week. The U.S. September consumer price index on Wednesday will be one of the last relevant data points before the Federal Reserve's next meeting, when the central bank is expected to keep rates on hold.

The 10-year Treasury yield traded at 5.253%, while the 30-year yield was at 5.607%, according to Tradeweb. Both were on pace for a small weekly decline. They reached 24-year highs of 5.365% and 5.733%, respectively, earlier this week.

In the eurozone, the German 10-year Bund yield ticked higher to 3.477% from 3.452%. French bonds rose to 4.854% from 4.795%.

Concerns about France remain due to doubts about the government's ability to reduce the budget deficit target to 5% of gross domestic product in 2027 due to a fragmented parliament. The government's plans to cut expenditure are among a number of factors which have prompted nationwide demonstrations in France.

Investors are also wary due to the country's upcoming plans for a significant amount of bond issuance.

France will issue bonds again on Thursday next week. Hefty supply will likely maintain selling pressure on OATs and keep yields high, Citi rates strategist Jamie Searle and Puja Sawant said in a note.

Issuance looks set to be particularly hefty early next year, which might concern investors, they said. The French Treasury Agency said in late September that it had penciled in 340 billion euros ($381.23 billion) in medium- and long-term government bond issuance, net of buybacks, for 2027. This target volume compares with this year's issuance target of 310 billion euros.

The outlook for global government bonds overall looks brighter, however, after yields on many major developed-market bonds recently surged to multiyear highs, Benoit Anne, head of market insights at MFS Investment Management, said in a note.

Markets might have gone too far in pricing in interest-rate hikes by the Federal Reserve, leaving scope for some retracement and a potential relief rally in government bonds, he said. Money markets fully price in three rate increases in the next 12 months, LSEG data showed.

"This may help cap the upside risks to rates from the standpoint of monetary policy," he said. The recent upward momentum in long-dated U.S. yields appears to have slowed somewhat, although fiscal challenges persist, he said.

Write to Emese Bartha at emese.bartha@wsj.com and to Paulo Trevisani at paulo.trevisani@wsj.com

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October 09, 2026 15:01 ET (19:01 GMT)