Eurozone Borrowing Costs Soar Amid Middle East Conflict Concerns

Eurozone: Eurozone government bonds are on track for one of their worst months in the past decade, pushing borrowing costs in some countries to their highest levels in several years, amid growing investor concerns about the impact of the Middle East conflict on the region's public finances. According to Yemen News Agency, on Sunday, Italy's 10-year bond yields rose to 4.14% this week, the highest level since mid-2024, amid a global sell-off in bond markets driven by inflation fears stemming from the sharp rise in oil and gas prices. Later, the yield fell back to 4.08%, but it remains up about 0.8 percentage points since the start of the month, a move reminiscent of a sell-off seen in the region during the 2022 energy crisis. In volatile trading, French 10-year bond yields touched nearly 3.9% on Friday, their highest level since 2009, while Spanish bond yields rose to nearly 3.7% for the first time since late 2023. Bonds have been under pressure this month as traders have increasingly bet on the European Cen tral Bank raising its key interest rates three times this year in an attempt to contain a projected surge in inflation.