The global bond market is going through one of its tensest sessions in years. The yield on the 10-year US Treasury note climbed to 5.34% on October 1, 2026, its highest level since 2002, while the 30-year Treasury came close to 5.65%, also a record in more than two decades.

The sell-off has spread to the United Kingdom, where the 30-year gilt yield broke above the psychological 6% threshold for the first time since 1998 and the 10-year yield reached 5.51%, the highest since 2007.

The spread between Italy’s BTPs (Buoni del Tesoro Poliennali, the country’s benchmark government bonds) and German Bunds widened to 109 basis points (as of 12:33 CET, Borsa Italiana data), with the yield on Italy’s 10-year bond rising to 4.7%, a new high since 2023.

Global yields at multiyear highs

The move is not limited to Italy and the US. The 10-year German Bund yield rose to 3.63% and the French OAT (Obligation Assimilable du Trésor, France’s benchmark government bond) touched 4.91%, up 7 basis points on the session, approaching the psychological 5% mark.

According to Reuters, today’s rise in French yields is the second-largest among the major European countries, behind only Italy’s. The pressure on French bonds is tied to the delicate budget season now under way in Paris, while the pressure on BTPs is compounded by a factor specific to Italy.

Italy under double pressure

Italian government bonds are also weighed down by the inflation data released by Istat, the national statistics institute. In September, consumer prices rose 4.2% year over year (up from 3.3% in August), with a monthly increase of 0.7%.

According to the institute’s official release, the acceleration was driven mainly by energy prices, both regulated (from 18.6% to 25.9% year over year) and non-regulated (from 17% to 22.2%), and by unprocessed food (from 3.8% to 5.5%). Core inflation, which excludes energy and fresh food, also rose, from 1.5% to 1.7%. The data further reduces the room for maneuver that markets perceive in Italy’s public finances, just as global markets are demanding higher yields to finance sovereign debt.

What market participants say is behind the move

Speaking to Reuters, Timothy Graf, head of European macro strategy at State Street, said:

«I don’t think there is a specific trigger. Moves like today’s look like forced position unwinds. But the reason we are at these levels is clear: central bank rates keep rising»,

adding that

«French OATs are being penalized because it is budget season and it is a complicated phase. Italian BTPs are also being hit hard».

Fred Neumann, chief Asia economist at HSBC, took a similar line: «there is more than inflation worrying bond investors right now» and «higher yields could be the new normal», in a market that large public deficits and the enormous financing needs tied to investment in artificial intelligence are putting under strain.

For Fiona Cincotta of City Index, «the only way to truly calm the market is to see governments make hard decisions on spending cuts». Rory McPherson of Wren Sterling observes that the «prolonged» bond sell-off remains correlated with oil prices, which have risen in recent weeks on Middle East tensions, as ECB chief economist Philip Lane pointed out in recent days. In the analyst’s view, the market «doesn’t have enough buyers» willing to absorb new issuance.

Editor’s note

This article was originally published in Italian on money.it by Ufficio Studi Money.it on October 01, 2026 as «Spread BTP-Bund a 109 punti, Treasury Usa ai massimi dal 2002 e Gilt al top dal 1998. Il sell-off obbligazionario non risparmia l’Italia». It has been translated and adapted for an international audience by the Money.it International desk.