The yield on the German 10-year Bund has surpassed 2.24%, reaching its highest level in five weeks. This increase aligns with higher US Treasury yields following a robust US jobs rort that has dampened expectations for significant rate cuts by the Federal Reserve.
In Stember, the US economy added 254,000 nonfarm payrolls, outpacing forecasts, while the unemployment rate decreased to 4.1%. This positive economic data has diminished the likelihood of a 50 basis point rate cut, with markets now anticipating a more modest 25 basis point reduction instead.
Conversely, inflation in the Eurozone has dropped to 1.8%, setting the stage for expectations of a 25 basis point cut from the European Central Bank at its upcoming meeting, marking a potential third reduction this year.
As of Monday, October 7, the Germany 10-Year Bond Yield stood at 2.25%, according to over-the-counter interbank yield quotes for this bond maturity. Analysts predict that the yield will trend downwards to approximately 2.00% by the end of this quarter, before further declining to 1.84% in the next twelve months.