Investing.com - German bond yields spiked to the highest level since September on Thursday, following revisions to the euro zone’s inflation forecasts and after European Central Bank President Mario Draghi said investors should get used to periods of higher debt market volatility.
Yields on German 10-Year Bunds surged 8.2 basis points, or 9.45%, to hit 0.961% during U.S. morning hours, after rising to an intraday peak of 0.998%, the most since September 25.
The yield increased more than 40 basis points in the previous three days, the biggest jump since at least 1998.
The sharp movement in the bond market was triggered by an upward revision in euro zone inflation forecasts and remarks by European Central Bank President Mario Draghi that markets should get used to volatility.
Elsewhere, in the U.S., the yield on 10-Year Treasurys advanced 3.6 basis points, or 1.52%, to hit 2.402%, the highest level since October 7.
Market participants were looking to the weekly report on U.S. jobless claims due later in the day, as well as Friday's nonfarm payrolls data for further indications on the strength of the country's job market.
On Wednesday, payroll processing firm ADP said U.S. non-farm private employment rose by 201,000 last month, just above expectations for an increase of 200,000.
The upbeat data raised hopes that the economy was regaining strength after contracting in the first quarter, fuelling speculation that the Federal Reserve could raise rates as soon as September.
In the currency market, the euro pushed higher against the U.S. dollar, climbing above the 1.13-level, as soaring German Bund yields provided support.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.5% at 94.89, the weakest level since May 19.