The Euro Area curve inverted through the ECB hiking cycle, overshot on the way back, and has now settled into a moderate positive slope -- placed alongside five other sovereign curves for context
The Euro Area yield curve has completed a full inversion-and-recovery cycle in under three years. The 10-year/2-year spread widened to +0.80 percentage points in July 2022 as markets priced coming ECB hikes, inverted to a trough of -0.58 in July 2023 as the ECB's policy rate outpaced long-term growth and inflation expectations, stayed inverted through mid-2024, then not just normalized but overshot to +0.92 by July 2025 -- steeper than before the hiking cycle began -- before moderating to today's +0.48. As of 16 July 2026, every segment of the curve from 3-month (2.30%) to 30-year (3.65%) slopes upward, with no inverted portion. Placed alongside six other sovereign 10-year yields, today's cross-market picture shows genuinely distinct regimes rather than one global rate level: Japan at 2.65%, Germany at 3.05%, France at 3.74%, Italy at 3.82%, the UK at 4.94%, and Mexico at 9.45%.
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View plansResearch Paper 2 of The New Global Macroeconomic Regime: The Transformation of Fiscal Policy, Monetary Policy and Global Trade
Research Paper 1 of The New Global Macroeconomic Regime: The Transformation of Fiscal Policy, Monetary Policy and Global Trade
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