Market Information Thursday 22 October 2026

Euro-area government bond yields increased as French borrowing costs reached their highest level since 2002. France’s 10-year yield touched 5%, having risen more than 20 basis points during the week, while its spread over German Bunds reached around 150 basis points. French fiscal and political concerns drove much of the pressure, while Italian bonds performed comparatively better. German 10-year yields rose to 3.428%, with higher oil prices adding pressure across European fixed-income markets.

Sterling strengthened against both the euro and dollar after September inflation reached 3.5%, strengthening expectations of a Bank of England rate increase in November. Markets were nearly fully pricing a 25-basis-point hike, with four increases expected by mid-2027. The pound reached its strongest level against the euro in 17 months, while investors also focused on the upcoming UK budget and whether fiscal plans would maintain credibility amid higher borrowing and energy costs.

Japan’s economy is approaching a transition from import-cost-driven price increases towards wage-driven inflation. The government plans temporary consumption-tax relief on food and household payments to cushion higher living costs, while arguing its fiscal measures can expand supply capacity without accelerating inflation. The Bank of Japan raised its policy rate to 1.25% in September as energy costs, strong global demand and a weak yen increased underlying inflation risks.

The 6M Euribor increased with 3 basis points to 3.02% compared to previous business day. The 10Y Swap increased with 2 basis points to 3.53% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.