Pressures on sovereign debt continue for the second consecutive day, with several countries seeing their bonds approach or hit multi-year or multi-decade highs. The renewal of the Middle East conflict, which pushed oil prices up again, should worsen inflation and lead Western central banks to new rate hikes, causing investors to sell sovereign bonds.
In Germany, ten-year bunds reached 3.375% during the morning, a new high since 2011. Ten-year Japanese bonds remained above 3% at 3.016%, after breaking that barrier for the first time in 31 years on Tuesday. In the United States, ten-year Treasury bonds remained above 4.8%, while ten-year British gilts renewed 2008 highs at 5.294%.
In Portugal, ten-year bonds reached 3.747%, setting new highs since 2023. In other maturities there were even more significant increases: four-year bonds rose 4.5 basis points to 3.186%, while six-year bonds saw a 4.1 basis point increase to 3.348%. Twenty-year bonds added 2.4 basis points to 4.252%.
Unlike most Western economies, Portugal benefits from debt reduction and fiscal correction in recent years, which give investors greater confidence. The new exchange of fire between Americans and Iranians in the Strait of Hormuz suggests a new inflationary wave, which should guarantee further interest rate hikes in the eurozone, the US, and the UK, raising costs for countries already highly leveraged.
