09.01.202614:31:25UTC+00German Bund Yields Head for Weekly Fall

On Friday, Germany's 10-year Bund yield was recorded at 2.83%, yet it was poised for a weekly decrease of approximately 7 basis points, marking its most significant drop since March. This decline occurred after the yield retreated from nearly nine-month highs due to a series of mixed economic indicators, which dampened expectations of tighter monetary policy in Europe. Notably, German exports and retail sales unexpectedly declined in November, whereas factory orders and industrial production exceeded expectations. Inflation figures were clearer: headline inflation dropped to 1.8% in December, falling below the European Central Bank's 2% target for the first time since September 2024. Additionally, across the wider eurozone, consumer price inflation fell to a four-month low of 2.0%, further diminishing the probability of a European Central Bank rate hike by the end of the year. Concurrently, in the United States, data suggesting a still robust labor market reduced the potential for immediate interest rate cuts by the Federal Reserve.