European bonds sank as it was revealed that Germany will suspend debt restrictions for the fourth year in a row, raising concerns about further borrowing as the eurozone economy weakens.
According to news reported today, Chancellor Olaf Scholz's government was forced into a radical budget overhaul last week by a ruling from Germany's highest court. Yields on German 10-year debt rose as much as six basis points, while yields on other core European bonds rose as well, following hawkish comments by policymakers.
Belgian central bank Governor Pierre Wunsch said on Thursday that the European Central Bank will not cut rates as long as wage growth remains strong, while his German counterpart Joachim Nagel said it would be a mistake to loosen too soon. Meanwhile, an account of the ECB's last policy meeting revealed that officials agreed to raise borrowing costs again if necessary.
Crude oil prices fell further as discord within OPEC+ forced the group to postpone an upcoming meeting, putting an end to speculation of further production cuts by the Saudi-led alliance. Brent crude fell below $81 per barrel after a volatile session on Wednesday that saw prices swing by more than $4, while West Texas Intermediate fell below $76.