13.02.202607:58:07UTC+00Germany’s 10-Year Bund Yield Falls to Two-Month Low

Germany’s 10-year Bund yield retreated toward 2.75%, its lowest level since December 4. The benchmark was also on track for a weekly decline of about 9 basis points, the steepest drop since March, as investors positioned themselves ahead of key US CPI data due later in the day, which could offer fresh guidance on the Federal Reserve’s policy trajectory.

In Europe, markets assessed signals that the European Central Bank remains broadly comfortable with the euro’s recent appreciation. Focus also turned to reports that Bank of France Governor François Villeroy de Galhau—widely seen as a dovish voice on the Governing Council—is expected to step down earlier than previously anticipated.

At the same time, ECB President Christine Lagarde said last week that the inflation outlook remains in a “good place,” downplaying concerns about the strength of the single currency. Money markets are currently pricing in only about a 30% chance of an ECB interest rate cut by December.