FX.co ★ Bund Yields Fall in October

Germany’s 10-year Bund yield closed October at around 3.34%, close to levels last seen in late August and more than 20 basis points lower over the month. Demand for safe-haven assets was bolstered by mounting concerns over France’s fiscal trajectory and the ongoing conflict in the Middle East, while the European Central Bank’s cautious stance also put downward pressure on yields.

Data published on Friday showed eurozone growth losing steam in the third quarter. Germany’s economy weakened, and France unexpectedly slipped into contraction as softer exports and lower investment weighed on output. Heightened social unrest in France added to investor uncertainty, even as inflation remained stubborn across the bloc.

On Thursday, the ECB left interest rates unchanged and offered little clarity on the future path of policy. President Christine Lagarde said policymakers had considered a rate increase but ultimately agreed unanimously to keep rates on hold, emphasizing that tighter financial conditions were helping to curb inflationary pressures.