Ireland taps the bond market as US debt costs spike

Ireland tapped the bond market on Thursday, issuing €1.25bn of Government bonds that will fall due in 2036 and 2055.

The National Treasury Management Agency (NTMA), which borrows on behalf of the State, borrowed at an initial yield – essentially the interest rate – of 3.242pc on €800m of bonds that will mature in 2036. The State will pay 3.822pc on a further €400m to be repaid in 2055.

The NTMA warned this week that the cost of servicing the national debt is likely to double by 2030. Thursday’s bond deal shows how much borrowing costs here have already risen. The new 10-year debt will cost the taxpayer twice what bonds borrowed 10 years ago – and now retired – cost. Ten-year bonds issued in 2016 priced at an initial yield of 1.16pc, compared with 3.242pc today.

The pricing is not a reflection of investor nervousness about Ireland, it is part of a wider shift to higher interest rates.

Germany’s 10-year bond yield fell to 3.074pc late on Thursday after jumping 10 basis points (bps) to hit 3.094pc early on Thursday, the highest since mid-May. The country is regarded as the most solid European debt issuer by investors.

Bonds issued in 2025 had a weighted average yield of 3.08pc and weighted average maturity of 18.7 years. 

Including older bonds, the average interest rate on the national debt was around 1.5pc last year.

So far in 2026, the NTMA has issued €9.45bn of benchmark bonds, out of a target to borrow €10bn-€14bn for the year.  

Meanwhile, an auction of 30-year US Treasury bonds on Thursday was set to command the highest yield since at least 2006, underscoring how swelling bond supply is driving investors to demand higher returns from government debt.

US government bonds were trading at yields near 5.07pc on Thursday morning.

The last comparable auction to draw a yield higher than 5.07pc was in November 2006. That year, the US Treasury resumed selling 30-year bonds after a five-year hiatus with the sale drawing 5.08pc.

Meanwhile, eurozone bond yields dipped on Thursday as oil prices steadied, but they remained at around their highest in seven weeks.

Germany’s two-year bond yield, which is sensitive to European Central Bank (ECB) rate expectations, fell 2bps on Thursday to 2.679pc after rising 12bps the day before. Yields move inversely to prices.

Part of what is moving bond markets is speculation of how likely the ECB is to raise interest rates this year.

“The next couple of days would be key to deciding whether we get further escalation, or this was another show of force,” said Mohit Kumar, chief European economist at Jefferies.

Italy’s 10-year bond yield fell 2bps to 3.887pc after rising 13bps on Wednesday, when the closely watched spread between Italian and German yields rose to its highest since early May at 81bps.

France’s 10-year yield was also down 2bps. The spread between French and German yields closed at 82bps on Wednesday, the highest since October last year, as investors sold the bonds of more indebted countries.

Source: Donal O'Donovan, Irish Independent, 9th of July 2026.