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Bond rout continues as U.S., German yields hit 9-month highs

The sharp rise in long-term government bond yields continued today, with the yields on the U.S. and German 10-year bonds hitting their highest levels since late September. In another day of volatile trading in the bond pits on Wall Street and across the pond in Europe, the big selloff in bonds and resulting spike in bond yields that picked up steam last month continued.

The 10-year German bund, which closed today at 0.978%, topped 1% for the first time since Septermber 2014. The bund hit an intraday high of 1.058%, up from 0.964% Tuesday, according to Tradeweb. Below is a one year chart showing the German bund’s spike back to 1% after nearly turning negative in April. Similarly, the 10-year U.S. treasury note today climbed as high as 2.493%, its highest level since September 30, 2014 when the yield last topped 2.5%, says Tradeweb.

Driving the selloff in the bond market — which had been viewed as a safe haven — and pushing yields higher: signs that the eurozone economy is showing improvement, which has reduced fears of dreaded deflation. Reports that the talks between debt-strapped Greece and its creditors, including Germany, also reduced the fear level in financial markets and the neccessity of holding bonds.