ING Rates Spark: Heavy US Treasuries and Tightening Eurozone Liquidity

US Treasuries continue to face upward yield pressure at the long end as real yields normalize and heavy issuance continues, alongside June foreign net selling of $72bn. In the Eurozone, ECB balance sheet runoff has trimmed excess liquidity to €2.16tn, widening money-market funding spreads and setting up longer-run structural cheapening for Bunds versus swaps.

Key Takeaways

• 1.US Treasuries face ongoing upward pressure on long-end yields driven by real yield normalization, heavy duration-weighted corporate and sovereign issuance, and persistent energy price risks.
• 2.Eurozone excess banking reserves have fallen by ~€300bn this year to €2.16tn as ECB bond portfolios roll off, widening unsecured funding spreads and pushing €STR wider versus the ECB deposit facility rate.
• 3.Foreign investors liquidated a net $72bn in US Treasuries in June according to TIC data, led by selling from Japan and China, though net 12-month Treasury buying remains positive at $205bn.

Table of Contents

• US Treasuries continue to trade with a heavy tone. Likely more to come
• The ongoing tightening of liquidity conditions in the eurozone banking system
• Tuesday’s events and market view

Report data

US Treasuries remain under pressure, especially the long end

Reports in this series

Rates Spark is shown in chronological order through this edition, published on August 17, 2026.

Part of the Rates Spark series — view all 32 editions

Looking for the latest edition? ING Think rates spark so how bad could this whole thing get (Sep 2, 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

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