Cost of Irish borrowing rises on bets for more global interest rate hikes

The yield or interest rate on the Irish 10-year bond rose to 2.75%.

The costs of borrowing for Ireland and other governments in the eurozone rose on Friday afternoon on expectations that global central banks will push interest rates higher.

The yield or interest rate on the Irish 10-year bond rose to 2.75%, the cost for French government to borrow money for 10 years rose to 2.8%, the cost for Italy increased to 4.8%, and the German bond rose to almost 2.2%. 

Italian yields - and their levels compared to those on German bonds - are closely watched as an indicator of the pressures facing Europe's weaker economies. Meanwhile, the yield on the British 10-year gilt or bond rose to over 4.2%.

The rises come after the latest report showing a still hot US jobs market threw cold water on expectations the US Federal Reserve would soon moderate its pace of interest rate hikes to prevent a more significant economic slowdown. 

US futures markets now indicate that there will be another US rate hike of three quarters of a point in November, with US rates seen peaking at over 4.6% next year. The jobs report sent US shares lower, with a sell-off in technology shares weighing heavily on the market. 

There was "nothing in the US jobs report to dissuade the Fed from continuing with its aggressive path of monetary tightening," said Stuart Cole, head macro-economist at Equiti Capital. 

Irish Examiner, Bloomberg, Reuters