European bond yields have risen due to concerns about inflation and economic stability on the continent, driven by fears of renewed tensions in the Middle East. This has particularly affected French, Italian, and UK bonds, which have fallen significantly over the past month among G7 countries. Meanwhile, German yields have increased due to worries about the economic policies of the far-right Alternative for Germany (AfD) party, which recently won a key election. Economists warn that Europe's weaker growth prospects leave governments with less room for maneuver in responding to these challenges, and some are already taking steps to strengthen their budgets by imposing tax rises or spending cuts.
concerns over the economic policies of the far-right AfD