Turmoil in government bond markets - increased costs for the eurozone

International government bond markets are facing severe pressure, driving up borrowing costs across the eurozone and the UK. The volatility, triggered by a historic sell-off in US Treasuries where 10-year yields hit 5.34%, has spilled over into Europe, pushing French and Italian yields to multi-year highs. Driven by persistent inflation, geopolitical energy shocks, and hedge fund liquidations, these market shifts have caused the euro to hit a 16-month low while impacting mortgage rates and equity markets globally.