Government borrowing costs rose across the globe on Thursday, although German bond yields came off highs after recording their biggest daily jump since the country’s reunification 35 years ago on Wednesday.
Bond prices and yields move in opposite directions, meaning that yields tick higher when the value of the asset declines.
Yields on German government bonds — known as bunds — skyrocketed on Wednesday, with the yield on the 10-year debt instruments adding around 30 basis points. The sell-off came after lawmakers from parties widely expected to form Germany’s next coalition government agreed to plans to reform historic debt policy rules to allow an increase in national defense spending.
German government borrowing costs continued to rise for most of Thursday but came off highs toward the end of the day.
The yield on the 10-year bund
, seen as a benchmark for the wider euro zone, ticked lower in the afternoon after earlier rising by 11 basis points. The yields on 5-
and 20-year bunds
ended around the flatline, after also trading higher earlier in the day. The DAX index, meanwhile — home to Germany’s biggest companies — touched on a record high on Thursday.
