Eurozone yields surge on energy-fueled inflation fears
Energy price spikes have pushed Eurozone bond yields to their biggest weekly rise since the war in Iran began, as markets anticipate more central bank rate hikes.
Eurozone government bond prices fell sharply on Friday, creating a selloff that surpasses the largest weekly decline observed since the start of the conflict in Iran. German, French, and Italian yields increased, driven by soaring energy costs that have heightened inflation concerns. The European Central Bank previously raised interest rates by 25 basis points, lifting its inflation forecast while lowering growth projections. Investors now expect at least three additional rate increases this year as U.S. diesel prices hit $6 per gallon for the first time in history. These market movements are expected to spread to other Group of Seven economies, with short-dated bonds showing significant weekly gains since early February.
