Germany’s 10-year yield climbed to 3.13%, its highest since May 20, while the U.S. 10-year Treasury fell toward 4.53% after softer inflation data offset Middle East tension-driven oil concerns.
The spread between German and U.S. 10-year borrowing costs narrowed to about 144 basis points, near its tightest level since early June, as euro zone bond yields rose on energy-driven inflation concerns linked to renewed U.S.-Iran fighting while U.S. Treasury yields eased after cooler-than-expected inflation data. Germany’s 10-year Bund yield rose to 3.13%, up 1 basis point on the day, 9 basis points on the week and 26 basis points in July. In the United States, the 10-year Treasury yield moved down to around 4.5254% in early Friday trading, with the 2-year at 4.1134% and the 30-year at 5.0680%, as investors weighed softer consumer and producer price data, jobless claims of 208,000 for the week ending July 11, and the inflation implications of higher oil prices.