ING Rates Spark: Different Parts of the Curve, Different Dynamics

US and European yield curves are experiencing divergent dynamics between the front and long ends as markets price in upcoming Fed and ECB rate hikes. Meanwhile, long-end yields remain elevated near multi-year highs due to US spillovers, oil price gains, and persistent deficit/supply concerns.

Key Takeaways

• 1.The market is increasingly pricing in a Fed rate hike for September following hawkish Jackson Hole commentary, shifting the burden of proof to the doves.
• 2.10y EUR swap rates reached near 3.4% (highest since autumn 2023) on US spillover, while long-end yields face upward pressure from supply, deficits, and rising oil prices.
• 3.Markets are pricing in 50bp of ECB tightening by February, keeping the EUR front-end anchored while the long-end tracks US yield moves.

Table of Contents

• The hawks now have the upper hand for September's Fed meeting
• The euro short end is set on 2-3 ECB hikes, but the long-end is less anchored
• Wednesday’s events and market view
• Author
• Disclaimer

Report data

With oil prices drifting higher, long-end yields continue to remain elevated

Reports in this series

Rates Spark is shown in chronological order through this edition, published on September 1, 2026.

Part of the Rates Spark series — view all 33 editions

Looking for the latest edition? ING Think rates spark growth disappointments would still build a bullish case (Sep 8, 2026)

1. May 14ING-Think-rates-spark-the-evaporation-of-real-yields
2. May 15ING-Think-rates-spark-flip-the-gaze-from-china-back-to-iran
3. May 19ING-Think-rates-markets-have-shifted-to-a-broader-inflation-impact
4. May 20ING-Think-rates-spark-still-exposed
5. May 22ING-Think-rates-spark-differences-brought-into-sharper-relief
6. May 27ING-Think-rates-spark-up-and-down-with-oil
7. May 28ING-Think-rates-spark-plenty-of-supply-as-we-approach-summer
8. May 29ING-Think-rates-spark-watch-inflation-expectations-drift-higher
9. Jun 3ING-Think-rates-spark-the-real-deal
10. Jun 4ING-Think-rates-spark-spread-exposures
11. Jun 10ING-Think-rates-spark-oil-losing-control
12. Jun 11ING-Think-rates-spark-bracing-for-a-hawkish-ecb
13. Jun 12ING-Think-rates-spark-oil-still-key-to-ecb-outlook
14. Jun 15ING-Think-rates-spark-the-damage-has-been-done
15. Jun 23ING-Think-rates-spark-gilts-dont-like-political-uncertainty
16. Jun 24ING-Think-rates-spark-bonds-back-to-hedging-market-risks
17. Jun 25ING-Think-rates-spark-more-repricing-risk-at-front-end
18. Jun 30ING-Think-rates-spark-too-early-for-the-doves
19. Jul 1ING-Think-rates-spark-uk-political-risk-closely-tied-to-inflation-outlook
20. Jul 3ING-Think-rates-spark-resumed-steepening-impulse
21. Jul 7ING-Think-rates-spark-potential-relief-for-gilts-amid-a-bearish-bias
22. Jul 8ING-Think-rates-spark-another-push-higher-in-real-rates
23. Jul 10ING-Think-rates-spark-markets-looking-through-geopolitical-risks
24. Jul 15ING-Think-rates-spark-eur-rates-cannot-follow-a-dovish-us
25. Aug 17ING Think rates spark heavy treasuries and tight eurozone liquidity
26. Aug 17ING Think rates spark xxxxxxxxx
27. Aug 24ING Think rates spark its about bigger buybacks not how its financed
28. Aug 25ING Think rates spark markets not pricing volatile times
29. Aug 26ING Think rates spark us pce and jackson hole
30. Aug 27ING Think rates spark hawkish ecb not helping french government bonds

Document Preview

Page 1 of 3

Subscribe for full accessCreate free account