German 10-year bond yield hits 2% for the first time since 2013 as the euro continues to slide

German 10-year bond yield hits 2% for the first time since 2013 as the euro continues to slide

By Jeffrey Smith – It hit a new 20-year low and bond yields touched 2% for the first time since 2013 as recession fears and rate hikes weighed on sentiment toward eurozone assets.

The euro slipped to as low as $0.9772, while the 10-year bond yield consolidated around 1.95% after trading higher at 2.01%.

Sentiment plummeted again this week in the wake of the US Federal Reserve’s guidance that it will continue to rally into next year, adding pressure on other central banks to either do the same or risk a rapid devaluation of their currencies.

The Bundesbank had warned earlier in the week that indicators of Europe’s largest economy falling into recession were multiplying rapidly, while the European Central Bank’s Isabelle Schnabel told T-Online in an interview published on Thursday that Germany was likely to be hit hardest. Germany. The rest of the eurozone because of the Russian shortage this winter.

“Stagnation may be inevitable here,” Schnabel said.

Adding to the uncertainty in the eurozone at the moment is the prospect of Italian elections, which polls indicate will reconstitute a right-wing coalition government led by Georgia Meloni’s Brotherhood of Italy.

Prospective members of the coalition have softened their anti-EU and anti-euro rhetoric during the campaign, but doubts remain over whether he will carry out the reforms laid out by outgoing Prime Minister Mario Draghi to ensure Italy receives billions of euros in support from the European Union. European Union to recover from the epidemic.

Without this money, the new Italian government may struggle to revive growth, especially in an environment where interest rates are rising sharply, raising the cost of servicing its massive debt burden. The yield on debt has already risen to over 4.20%.

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