Euro-area bond yields rose to multi-year highs on Thursday after the ECB, as
expected, raised rates by 25bp to 2.5% and said risks remain tilted to higher
inflation. Germany’s 10-year bond yield climbed 2bps to 3.457%, its highest
since 2011; the 2-year yield, more sensitive to rate expectations, added 2bps to
3.071%. Traders marginally increased odds of further hikes over the next six
months. Rising oil prices are adding upward pressure on borrowing costs. The
euro slipped slightly.
