Tradeweb Government Bond Update – March 2026

Global government bond markets experienced a widespread sell-off in March amid geopolitical risks, persistent inflation dynamics and fiscal concerns. Central banks across the Americas, Europe and Asia largely held interest rates steady, citing uncertainty over the broader economic outlook.

Against this backdrop, 10-year benchmark bond yields experienced double-digit basis point increases during the month. Those for the UK registered their highest levels since the 2008 financial crisis, closing March 69 basis points higher at 4.92%. The Bank of England maintained its base rate at 3.75%, after cutting it six times since August 2024.

Similarly, the European Central Bank kept interest rates unchanged, reaffirming its commitment to stabilizing inflation at 2% in the medium term. In Germany, the inflation rate is expected to be +2.7% in March, up from 1.9% in February. The German 10-year Bund yield climbed 36 basis points to finish the month at 3.01%, while its French and Italian counterparts rose by 50 and 63 basis points to close at 3.73% and 3.91%, respectively.

Roderick Joniaux, Head of European Government and Supranational Products at Tradeweb, said: "In a month of intense yield movements, European government bond markets continue to be focused on fiscal trajectories and growth prospects. Weaker economic data and concerns over the longer-term impact of energy price fluctuations are adding complexity to the policy outlook."

In the U.S., consumer confidence fell to 53.3 in March from 56.6 in February, reflecting increasing uncertainty among households. The Federal Reserve held rates at 3.5% to 3.75%, balancing still-elevated inflation expectations with emerging signs of labour market cooling and softer growth. The yield on the U.S.10-year Treasury ended March nearly 36 basis points higher at 4.32%.

Japanese government bond yields rose 24 basis points over the month, closing at 2.35%. The headline S&P Global Japan Manufacturing Purchasing Managers' Index™ (PMI) slipped from a 45-month high of 53.0 in February to 51.6 in March. The country's central bank left its key short-term rate unchanged at 0.75%.

Bucking the trend, the Reserve Bank of Australia raised its benchmark rate by 25 basis points to 4.1%. Consumer confidence increased to 91.60 points in March from 90.50 points in February. The yield on the Australian 10-year government bond climbed nearly 36 basis points to finish the month at 4.97%.

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