Report published September 23, 2026

Rates Spark: The Overshoot Commences – ING Strategy on Rising US and European Bond Yields

ING · September 23, 2026

Strong September PMIs have propelled US 10-year yields above 5.1% and Euribor 10-year rates to 3.5%, initiating a potential yield overshoot that could stretch US 10-year yields toward 5.5%. This rate surge poses severe challenges for European sovereign debt dynamics, widening peripheral and semi-core spreads such as French OATs versus German Bunds.

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Finvaulta summarizes ING's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Strong US composite PMI data (58.4) pushed US 10-year Treasury yields above 5.1%, raising the risk of an overshoot into the 5.25% to 5.5% range.
2.Rising yields pose risks for European debt dynamics, widening sovereign spreads such as the 10Y French OAT/German Bund spread beyond 100bp.
3.The rise in European rates is heavily influenced by external factors, including higher US real yields, Japanese rate pressure, and higher oil prices.

Rates Spark: The overshoot commences
PMIs have their day in the spotlight, and the US Treasury yield tops 5% with some conviction this time
Better growth is not necessarily good news for European government debt dynamics
Thursday's events and market views

Report data

Higher rates can lead to wider European government bond spreads

Metric	Estimate	Context
US Composite PMI	58.4 index	Knocking on the door of 60, historically associated with boom conditions.
US 10-Year Treasury Yield	5.1%	Breached above 5.1% following PMI print; also the revised year-end forecast.
Probability of Fed Rate Hike in October	70%	Probability has moved above 70%.
Carry Spread (Fed Funds to 2-Year Yield)	100 bps	Back up at over 100bp.
French 10Y OAT - German Bund Spread Widening	6 bps	Widened by some 6bp to push spread to well above 100bp.