FX.co ★ German Bund Yields Fall as Weak Industrial Data and Political Risks Weigh

The yield on Germany's 10-year Bund has decreased to 2.68%, marking its lowest point since September 17, as investors digest disappointing German industrial data while keeping an eye on political developments in France and the United States. In August, German industrial production fell by 4.3% month-over-month, the steepest drop since March 2022, far exceeding the anticipated 1% decline. This was mainly due to a significant downturn in car manufacturing.

In France, President Emmanuel Macron is under increasing pressure to either call early elections or resign following the unexpected resignation of outgoing Prime Minister Sébastien Lecornu, who has entered into two-day negotiations. Although Lecornu suggested on Wednesday that dissolving the parliament is unlikely, the discussions indicate a shared intent to approve a budget by the end of the year.

Simultaneously, the ongoing US government shutdown shows no signs of resolution, causing concern that delays in vital data releases could complicate the Federal Reserve's policy decisions.