Tradeweb Government Bond Update – July 2026

After a relatively subdued June, global government bond markets experienced a sell-off in July, with 10-year benchmark yields recording double-digit increases. Those for Greece saw the largest move, climbing 40 basis points to end the month at 3.89%.

European government bonds accounted for many of the month's largest shifts. In addition to Greece, Italy's 10-year yield rose 36 basis points to 4%, followed by France (up 32 basis points to 3.98%), Ireland and Germany (both up 30 basis points to 3.34% and 3.16%, respectively).

At its July meeting following June's increase, the European Central Bank (ECB) left rates unchanged with some market participants looking ahead to the possibility of further rate hikes. The ECB's quarterly Survey of Professional Forecasters pointed to higher projected inflation and softer economic growth across some measures. At the same time, the central bank's second-quarter Economic Bulletin indicated that activity had improved slightly despite the recent energy shock.

Roderick Joniaux, Head of European Government Bonds and Supranational Products at Tradeweb, said: "Markets repriced nominal yields upward in July amid an increase in oil prices, higher inflation expectations, less monetary tightening or even rate hikes, and an increase in sovereign supply. A great deal of uncertainty remains around geopolitical events and central bank moves. All eyes are on August and September as a gauge of future central bank policy sentiment."

Elsewhere in Europe, Sweden's 10-year government bond yield rose 36 basis points to 3.02%. While headline CPI and CPIF inflation fell in July, underlying or core inflation increased. Data from Statistics Sweden showed that the country's economy expanded by 1.4% in the second quarter compared with the first three months of the year.

In the UK, the yield on the 10-year Gilt climbed 27 basis points to finish at 5.04%, after reaching 5.12% on July 23. The latest inflation data showed headline CPI and CPIH readings lower than their prior figures, with core readings unchanged; all remained above the Bank of England's 2% target. The central bank left rates unchanged at its July meeting in a 6-3 vote, with the minority voting for a cut.

Across the Atlantic, the U.S. 10-year Treasury yield rose nearly 27 basis points to close July at 4.71%. Inflation data showed CPI, PCE and PPI readings cooling, although all remained above the Federal Reserve's 2% target. The Fed left rates unchanged in July in a 9-3 decision, with the three dissenters voting for an increase. The advance estimate for second-quarter 2026 GDP showed annualized growth of 1.5%, compared with 2.1% in the first quarter.

In Asia Pacific, Australia's 10-year government bond yield ended the month nearly 26 basis points higher at 4.99%, after reaching 5.09% on July 24. Japan recorded the smallest increase among the markets tracked, with its 10-year bond yield rising 11.5 basis points to 2.79%. The Bank of Japan left rates unchanged, but signalled that it could raise them if inflation exceeded its target.

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