US Treasury Yields Ease After Strong 10-Year Auction as Global Bonds Struggle

U.S. Treasury yields finished moderately higher Wednesday but retreated sharply from session peaks after a strong 10-year note auction boosted demand for government debt, while European bond markets faced heavier selling pressure.

The benchmark 10-year U.S. Treasury yield rose 1.8 basis points to 5.286%, while the 30-year yield climbed 3.2 basis points to 5.673%. Earlier, the yields had jumped as much as 9.5 and 8.7 basis points, respectively.

Demand improved following the Treasury Department’s $39 billion 10-year note auction. The sale cleared at the highest yield for a 10-year auction since November 2000 but attracted solid investor interest, helping stabilize the broader U.S. bond market.

Investors also assessed minutes from the Federal Reserve’s September Federal Open Market Committee meeting. The minutes showed most policymakers believed another interest rate increase would likely be appropriate before year-end.

The Fed unanimously raised its benchmark rate by 25 basis points in September, its first increase in more than three years. Updated projections also pointed toward additional tightening, while Fed Chair Kevin Warsh emphasized the difficulty of returning inflation to the central bank’s 2% target.

European government bonds faced greater pressure. France’s 10-year OAT yield climbed to 4.819%, while its two-year yield reached 3.576%. Germany’s benchmark 10-year yield remained relatively stable near 3.50%, widening the risk premium investors demand for holding French debt.

Concerns about France’s public finances continue despite Marine Le Pen proposing €140 billion in net spending cuts designed to bring the budget deficit down to 3% of GDP by 2030. France’s deficit is projected at 5.4% of GDP in 2026, well above the European Union’s 3% threshold.

In Britain, the 30-year gilt yield reached its highest level since January 1998. The move followed Chancellor John Healey’s meeting with primary gilt dealers, where he reaffirmed the government’s commitment to fiscal credibility and economic stability amid challenging global financial and geopolitical conditions.