FX.co ★ German Bund Yields Hit Three-Month High

Germany's 10-year Bund yield surpassed 2.77%, marking its highest point since early September. This increase stemmed from robust economic data, which has diminished the likelihood of the European Central Bank reducing rates soon. At the same time, Germany's budget indicates a rise in borrowing for the upcoming year. Notably, German factory orders saw a 1.5% rise in October, building on a strong 2% increase in September, and significantly exceeding market projections of a 0.5% uptick. Additionally, the Eurozone's GDP for the third quarter has been revised to show a 0.3% growth from an earlier estimate of 0.2%. Earlier in the week, Eurostat disclosed that inflation in the Eurozone increased to 2.2%, slightly above the ECB's 2% midpoint target. On the fiscal front, German lawmakers recently approved the €524 billion federal budget for 2026, following extensive political negotiation. This includes approximately €180 billion derived from borrowed funds. Globally, Bund yields gained further support from trends in the bond market, rising in step with Japanese government bonds after Bank of Japan Governor Ueda indicated that policymakers might consider a rate hike later this month.