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European bond market stress eases as oil prices fall

Brent crude was down about 0.5% to $95.2 a barrel, helping pull 10-year German bund yields to 3.36% and 10-year French yields to 4.23%.

Reported · Written up by our desk · Government Bonds

European government bond market stress eased on Thursday as oil prices declined and investors dialed back fears of an inflation-driven rate shock, with several countries seeing lower yields at the start of trading. The UKs bond market strengthened slightly, with 10-year gilt yields dropping by more than 4 basis points to 5.195%, after hitting an 18-year high the prior day.

In the euro area, yields also eased, with 10-year German bund yields down 1.5 basis points to 3.36% and French 10-year bond yields 1.5 basis points lower at 4.23%. A measure of calm was also noted by market participants as crude slid, according to Guardian Business.

Brent crude was down about 0.5% to $95.20 a barrel, which reduced concerns that higher energy costs would push interest rates higher. Separately, the yen strengthened against the US dollar, gaining 1.4% to ¥156.5 per dollar, amid rising expectations that the Bank of Japan will raise rates more nimbly to counter inflationary pressures, according to the coverage.

Latest closeWTI crude $91.79 ▼3.0%|Brent $97.67 ▼1.6%

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