FX.co ★ Germany’s 10-Year Bund Yield Nears One-Year High

Germany's 10-year Bund yield is edging closer to 2.9%, nearing its peak since March 2025. Investors are currently juggling stronger-than-anticipated domestic data and global market fluctuations. Notably, Germany’s ZEW Economic Sentiment Index jumped to 59.6 in January, the highest it's been since July 2021, surpassing expectations of 50. This surge reflects optimism for an economic rebound in 2026, despite persistent uncertainties surrounding US trade policies. Simultaneously, geopolitical tensions and global market disruptions have exerted additional pressure. US President Donald Trump's persistent declarations regarding US control over Greenland, along with threats of imposing tariffs on several European nations if negotiations fail, have compelled traders and policymakers to consider potential European strategies. Additionally, market volatility in Japanese government bonds has intensified, following Prime Minister Sanae Takaichi’s announcement of snap elections in February, further impacting investor sentiment.