FX.co ★ Germany’s Bund Yields Rise on GDP Growth

Germany's 10-year Bund yield increased to 2.83%, rebounding from a recent low of 2.78% reached earlier this week. This shift follows the release of data indicating that Europe's largest economy, Germany, is anticipated to grow in 2025. The Gross Domestic Product (GDP) saw a 0.2% increase last year, marking the end of a two-year downturn. This recovery has been bolstered by both household and government spending, yet persistent vulnerabilities in the manufacturing sector continue to pose concerns for future economic stability. With inflation in the Eurozone aligning with its target, financial markets are predicting that interest rates will remain unchanged through 2026. European Central Bank (ECB) member François Villeroy de Galhau recently described the notion of a rate hike in 2026 as "fanciful." Meanwhile, in the United States, investors are analyzing the impact of stronger-than-anticipated retail sales figures against lower-than-expected core inflation numbers, considering the potential for interest rate reductions later in the year.