A war-driven oil shock, a new round of central-bank hikes and widening fiscal deficits have pushed long-dated government yields to multi-decade highs across the US, UK, Europe and Japan. The curves below show where each market stands, and what it is pricing next.
UK 30-year — highest in the group; touched 6.03% on 1 Oct, a G7 level last seen in Italy in 2012.
US 10-year — highest since 2002, +48 bp in a month after the Fed’s first hike since 2023.
France–Germany 10Y spread, near euro-crisis levels; France now yields more than Italy and Greece.
China 10-year — falling while the rest of the world sells off; Taiwan not far above at 1.99%.
| Market | Policy rate | Last move | 2Y | 10Y | 30Y | 2s10s | 10s30s | vs Bund |
|---|---|---|---|---|---|---|---|---|
| UK | 3.75 | Hold (6–3) | 4.88 | 5.47 | 6.00 | +59 | +53 | +197 |
| Australia | 4.60 | ▲ 29 Sep | 4.94 | 5.41 | 5.88 | +47 | +47 | +191 |
| US | 3.75–4.00 | ▲ 16 Sep | 4.79 | 5.33 | 5.71 | +54 | +38 | +183 |
| France | 2.50 (ECB) | ▲ 10 Sep | 3.65 | 4.90 | 5.44 | +125 | +54 | +140 |
| Canada | 2.25 | Hold | 3.24 | 3.95 | 4.32 | +71 | +37 | +45 |
| Japan | 1.25 | ▲ 18 Sep | 1.94 | 3.09 | 4.19 | +115 | +110 | −41 |
| Germany | 2.50 (ECB) | ▲ 10 Sep | 3.06 | 3.50 | 3.87 | +44 | +37 | — |
| Taiwan | 2.00 | Hold | 1.66 | 1.99 | 2.17 | +33 | +18 | −151 |
| China | — | Easing bias | 1.26 | 1.69 | 2.13 | +43 | +44 | −181 |
The US–Iran war (since February) drained global oil stocks. Hormuz flows are back near pre-war levels, but Brent is ~$103 after Houthi attacks and Gulf hurricane outages. Headline inflation is rising again: US CPI 3.4%, euro area 3.3%.
The Fed, ECB, BoJ and RBA all raised rates in the last four weeks. The BoE held only on a 6–3 vote. Markets price more: one more Fed hike, about three more from the ECB. Only Canada, Taiwan and China are sitting it out.
US debt passed $40 trillion in August. France’s 2027 budget was rejected by markets, the UK Budget due 28 Oct has almost no headroom, and Japan is spending more as the BoJ buys fewer bonds. Investors want more term premium to hold long debt.
The €54bn austerity budget (1 Oct) still runs a 5.0% deficit, with debt at ~117% of GDP and a minority government. The OAT–Bund spread hit ~150 bp, near euro-crisis levels. The ECB’s backstop (TPI) is meant for unwarranted spread moves, so it may not apply. France has the steepest 2s10s of the group (+125 bp).
Bank Rate 3.75%, but the 2Y sits 113 bp above it: markets doubt the BoE can stay on hold. Energy-driven inflation and a thin fiscal buffer before the 28 Oct Budget keep the 30Y near 6%.
The Fed raised to 3.75–4.00% on 16 Sep and signalled more. The long end rose faster than the front end, a sign of rising term premium rather than just higher rate expectations. The 20Y yields more than the 30Y, a structural quirk of the 20Y bond.
BoJ at 1.25%, the highest since 1995, after a split 7–2 vote. PM Takaichi’s extra budget and food-tax cut, plus a shrinking BoJ bid, leave the 10s30s spread at +110 bp, double any peer. The yen weakened anyway, a sign markets doubt the tightening.
RBA hiked to 4.60%; its flat 1–4Y curve says it is nearly done. BoC holds at 2.25%, but markets price catch-up hikes. The Bund stays the euro anchor.
China’s yields are falling on a weak economy and subdued prices; its 10Y sits ~365 bp below the US. Taiwan is the opposite: September exports +60.9% y/y on AI demand and CPI above 2% for four months, yet the CBC holds at 2%. A savings glut and managed currency keep its curve the flattest (2s10s +33 bp, 10s30s +18 bp). If the CBC is forced to catch up, or the AI cycle turns, it is the most exposed.
| Oct | US September CPI: the case for another Fed hike |
| Oct–Nov | French budget vote. Does the OAT–Bund spread hold above 150 bp? |
| 28 Oct | UK Budget: tax rises vs. a gilt 30Y back above 6% |
| 3 Nov | RBA decision at 4.60% |
| Ongoing | Hormuz and oil. A sharp break in AI-linked equities would flip the trade toward bonds. |