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Market Analysis

German Bond Yields Decline as Investors Seek Safety in Fixed Income
Amos Simanungkalit · 4.8K Views

13

German bond yields dropped in early trading on Monday as investors flocked to the safety of government debt, anticipating significant interest rate cuts from central banks following weak U.S. economic data on Friday that undermined confidence in global growth.

Germany's 2-year bond yield (DE2YT=RR) fell by over 15 basis points (bps) to 2.189%, marking its lowest level since March 2023. The 2-year yield is particularly responsive to expectations surrounding European Central Bank interest rate decisions.

The benchmark German 10-year yield (DE10YT=RR) for the euro zone declined by more than 6 bps to 2.095%.

Stock markets tumbled on Monday, with Japan's Nikkei 225 index plunging 12.4% (N225) and European futures falling 2.3% (STXEc1).

Traders on Monday were anticipating approximately 95 bps of further ECB rate cuts this year, an increase from the roughly 50 bps expected in late July.

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.

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