FX.co ★ German Bund Yields Hit Two-Week Low

Germany's 10-year Bund yield has decreased to 2.67%, marking its lowest point since November 12. This decline traces a similar drop in US Treasury yields, following unexpectedly weak US economic data that heightened predictions for a Federal Reserve rate cut in December. In September, US retail sales increased by just 0.2%, falling short of the projected 0.4% rise, while ADP figures indicated a rise in job losses in the four weeks leading up to November 8. Within Germany, the GDP has been confirmed as stagnant in the third quarter, hindered by declining exports and diminished private consumption, which intensifies concerns about the future of Europe's largest economy. Despite this, the data did little to shift expectations regarding European Central Bank policy, with markets still projecting that rates will remain unchanged through 2026. In the US, the likelihood of a December Fed rate cut has surged above 80%, thanks to the soft data underscoring a slowdown in economic momentum, further bolstered by dovish remarks from several Fed officials.