Analysis by NN Investment Partners (NN IP) shows that the yield on the benchmark 10-year German Bund yield is trending up from the low reached in early September.
The 10-year Bund yield fell from around 60bps in mid-July to just above 30bps in early September but has trended upwards since then and is currently trading close to 50bps.
The 10-year Bund yield has been rangebound for most of this year, bouncing back four times from troughs of between 16 and 30bps to peaks of between 43 and 60bps.
One of the key drivers behind the latest trend in rising yields seems to be coming more from other developed markets, with the Fed, Bank of Canada and the Bank of England all signalling rate rises.
Expectations and fear of monetary policy normalization have fluctuated. But it is certainly not the only factor that drives these cycles. The combination of underlying developments in the real yield and inflation expectations have been important: 5y-5y forward inflation expectations fell sharply between February and late June for instance, but the inflation expectations have risen moderately since then.
Pieter Jansen, senior multi-asset strategist at NNIP