European bonds under pressure from energy costs and political risk as German 10 year yield nears 15 year high

According to Ecoiran, citing Bloomberg, in a report published Monday, September 7, 2026 (16 Shahrivar 1405), Europe's government bond market has faced a selloff in recent weeks, with long term borrowing costs for France, Italy and the UK posting the sharpest one month rise among G7 economies. The report said European natural gas prices have risen more than 120 percent since the start of the Iran war and hit a three year high last week, fueling inflation concerns and pushing markets to price in three 25 basis point European Central Bank rate hikes over the next year. TradingEconomics reported the same Monday that Germany's 10 year Bund yield reached 3.36 percent, near last week's more than 15 year high of 3.3951 percent, a rise that came alongside the far right Alternative for Germany party's 44 percent showing in the Saxony Anhalt state election and ahead of this week's European Central Bank meeting. Ecoiran also reported that in France, a budget deficit above 5 percent of GDP and the 2027 election have pushed the country's bond risk premium over Germany's close to its highest level since Europe's 2012 debt crisis.