Weekly bond digest: July 27 – August 2, 2026

Yield Curves

German yields rose at the long end last week, tilting the curve steeper. The move came from climbing energy prices, as US–Iran tensions flared again, plus fresh tariff headlines. Shorter-dated yields barely moved after the ECB left rates unchanged. The 10-year Bund ended around 3.2%, a few basis points higher, while two-year yields dipped slightly.

US Treasuries sold off at the long end and the curve twisted noticeably steeper. The trigger was the Federal Reserve’s July meeting: it held rates at 3.50–3.75%, but comments afterwards raised doubts about how firmly it will fight inflation. Long-term yields jumped — the 30-year rose about 12 basis points — as investors demanded more compensation to hold long bonds. Two-year yields, tied more closely to Fed policy, slipped a touch.

UK gilts followed the same pattern, with long-dated yields rising while the front end held steady. The Bank of England kept its rate at 3.75% in a split vote, signalling no hurry to move. Thirty-year gilt yields rose around 5 basis points, in line with the broader climb in long-term borrowing costs.

Top gainers

Gabon’s dollar bonds dominated the gainers, with several maturities climbing 3–4% as the sovereign’s paper rallied across its curve. The other standouts were company-specific rather than market-wide: steelmaker CSN Inova, pharmaceutical group Bausch Health and airline JetBlue Airways all rose sharply. These gains ran against the broader tone in credit, where risk premiums actually widened over the week.

Top losers

The single biggest faller was Virgin Media O2, whose 2032 sterling bond dropped almost 10%. The rest of the list was long-dated US investment-grade paper — Corning, Qualcomm, Nvidia, AT&T and KLA Corp. They fell for one simple reason: long-term US yields rose, and the longer a bond’s maturity, the more its price drops when yields climb.

Rating changes

Note: only long-term senior unsecured ratings were taken into account.

Upgrades comfortably outnumbered downgrades, 26 to 11. Among the better-known names moving up were Tenet Healthcare, lender CIBC Bank USA, Spanish builder Grupo ACS and China Resources Land. On the downside, car-rental group Hertz was cut deeper into junk, from B- to CCC. Several smaller, troubled borrowers slid toward default, including Grupo Antolin and Petra Diamonds (both to SD) and Loparex and ASP Unifrax (both to D).

New issues

Supply stayed heavy, and for the first time in a while investors pushed back — demanding higher yields and stronger protections. Data-centre and AI-linked borrowing stayed the dominant theme, with Equinix selling $3 billion of US investment-grade bonds. Sovereigns were active too, with Chile and Uruguay both tapping the market.