German Bond Yields Surge, Global Markets React

German bond yields have spiked dramatically, with 10-year Bund yields surging 32 basis points to 2.80%, marking the largest sell-off since the fall of the Berlin Wall. This surge is driven by expectations of increased government spending on military and infrastructure by the new coalition government. The move has steepened global bond curves, with Japanese government bond yields also reaching 14-15 year highs across various tenors. Meanwhile, the Bank of Japan has yet to respond, despite recent hints at potential unscheduled bond buying operations. Markets are now focused on the upcoming ECB rate decision, as the ripple effects of Germany's fiscal shift continue to be felt across global financial markets.
Source: FXStreet