FX.co ★ German Bund Yield Hits Fresh 1-Month High

Germany's 10-year Bund yield reached 2.68%, marking its peak since October 9, driven by optimism surrounding a potential resolution to the US government shutdown. This optimism followed recent progress in the US Senate towards reopening federal agencies. Alongside this development, investors continue to weigh concerns about Germany's domestic economic prospects amidst mixed signals regarding future monetary policies from central banks. Recent reports revealed disappointing industrial output figures for Germany, and the Bundesbank highlighted escalating financial stability risks. In a recent interview, ECB Vice President Luis de Guindos stated that current policy rates are suitable while underscoring the necessity for the ECB to remain "very prudent and cautious." Presently, money markets attribute a roughly 40% chance to a 25 basis points ECB rate reduction by September 2026. Meanwhile, in the US, expectations for a possible Fed rate cut in December have intensified following data indicating job losses in October, a marked drop in consumer confidence, and layoff rates hitting a two-decade high.