FX.co ★ Germany 10-Year Bond Yield Near 9-Month Highs

Germany's 10-year Bund yield remained above 2.86%, hovering close to a nine-month peak as investors continued to evaluate the global monetary policy landscape. As anticipated, the Federal Reserve implemented a 25 basis point rate cut during its December 2025 meeting. It also signaled the possibility of one more reduction in 2026, offering some reassurance to investors that the policymakers maintained their stance and did not adopt a more aggressive approach.

In Europe, the focus shifts to the upcoming European Central Bank (ECB) meeting next week. Markets currently anticipate that interest rates will remain unchanged for the fourth consecutive meeting, following remarks by several policymakers and economic data that surpassed expectations. Traders are factoring in approximately a 40% chance of a 25 basis point rate hike by the close of the following year. Euro Area inflation registered at 2.2% in November, with the GDP reflecting a growth of 0.3% in the third quarter. At a recent Financial Times conference, ECB President Christine Lagarde remarked that "the Eurozone area is resisting better than what we had anticipated back in April," suggesting that policymakers are likely to upgrade their growth projections in the forthcoming meeting.