Global bond markets partially steadied after a sharp sell-off drove borrowing costs in the UK, Europe and the United States to multi-decade highs, while the euro fell to its weakest level against the dollar in roughly 17 months, or since May 2025. German Bund yields declined as demand for the eurozone's safest sovereign debt strengthened, but energy costs linked to the Iran war, fiscal risks and concerns about economic resilience kept yields elevated. Brent crude fell about 2% to around $99.95 a barrel, easing some inflation pressure. UK 10-year gilt yields eased to about 5.37% after briefly reaching their highest level since July 2007, while 30-year yields fell to around 5.92% after exceeding 6% for the first time since 1998. France's 10-year yield reached 4.96%, its highest since July 2002, while Italian 10-year BTP yields were 4.69% after reaching their highest level since 2023. UBS European rates strategist Reinout de Bock closed a bearish French-bond position and opened a short position in Italian BTPs against German Bunds, with the BTP-Bund spread near 127 basis points. Higher gilt and swap rates are raising UK mortgage funding costs: Richard Merrett expects his monthly payment to rise from £550 to £1,650 when his 1.14% five-year fixed-rate deal expires in early 2027. The Bank of England estimates that more than 5 million households could face higher repayments by the end of 2028.