17:27 - 18.08.2026

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August 18, Fineko/abc.az. Increased government spending worldwide and persistent inflationary pressures following a oil price shock have triggered sharp losses in global bond markets.

Yields on Germany's August 2056 bond have climbed back to levels not seen since the Eurozone debt crisis.

US Borrowing Costs Reach Multi-Decade Highs This movement reflects a broader global trend. Last week, the US sold 30-year Treasury bonds at the highest interest rate in a quarter-century, while borrowing costs on benchmark 10-year notes rose to their highest level since 2007.

Germany's Borrowing Needs to Hit Record Highs Commerzbank AG rate strategist Hauke Siemssen highlights that Germany's financing requirements will rise sharply in 2027, with the draft budget indicating a net financing need of 204 billion euros.

According to Siemssen's forecasts:

• Net bond issuance: Is expected to jump from 137 billion euros in 2026 to a record 163 billion euros in 2027.

• Gross issuance: Will hit an all-time high of around 400 billion euros.

The surge in funding needs stems from Germany's rising defense and infrastructure expenditures, along with record principal redemptions totaling 238 billion euros. However, financing will not rely solely on bond sales, with short-term treasury bills, cash reserves, asset sales, and funding from state development bank KfW serving as alternative options.