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Ultra-long euro zone bond yields mixed as fiscal concerns weigh
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Ultra-long euro zone bond yields mixed as fiscal concerns weigh
Sep 4, 2025 12:14 AM

Sept 4 (Reuters) - Ultra-long euro zone government bond

yields edged down on Thursday after weak U.S. data and dovish

remarks from Fed Governor Christopher Waller.

In the euro area, investors remained concerned about rising

public debt and increased bond supply, with France's government

facing a likely collapse next week over a contested budget vote,

while Germany is ramping up fiscal spending.

As investors worried about the debt levels of European

countries, ultra long-dated government bonds have come under

selling pressure. Markets expect Germany's investment plans,

along with likely increases in defence spending across euro area

countries, to push up debt.

The German 10-year bond yield, the benchmark for

the euro zone bloc, dropped one basis point to 2.74%. Yields on

30-year bonds were down 1.5 bps at 3.34%.

U.S. borrowing costs edged up on Thursday after falling

sharply on Wednesday following data that showed job openings

fell in July.

France's 30-year bond yield fell one bp to

4.45%. It hit 4.523% on Tuesday, its highest since June 2009.

The yield gap between 10-year French government bonds

and safe-haven German Bunds - a market gauge of

the risk premium investors demand to hold French debt - stood at

81 bps after reaching more than 82 bps last week.

French Finance Minister Eric Lombard said the government

would have to compromise on plans to cut the budget deficit if

Prime Minister Francois Bayrou is toppled in a confidence vote

on September 8, the Financial Times reported on Wednesday.

Spain's 30-year government bond yields were down

one bp at 4.24%. They reached 4.32% on Tuesday, their highest

since November 2023.

Italy's 10-year yield was flat at 3.64%, and the

gap between Italian and German bunds was at 90

bps. Italy's 30-year yields fell 1.5 bps to 4.60%.

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