Bund Yields Rebound After Strong US Inflation
Germany’s 10-year Bund yield climbed to 3.49%, tracking higher US Treasury yields after stronger-than-expected US inflation data showed consumer prices and core inflation rising more than anticipated in September, increasing the likelihood of a Federal Reserve rate hike this month. Markets now see around a 50% chance of a hike, up from roughly 22% before the report. Meanwhile, ECB President Christine Lagarde said elevated energy-driven inflation has yet to spread across the broader euro-area economy, supporting a wait-and-see approach. However, persistent inflation surprises and the ongoing US-Iran conflict have prompted markets to price in another ECB rate hike in December. Bond markets have shown tentative signs of stabilization following a global sell-off in late September and early October, but persistent concerns over energy prices, inflation and rising borrowing costs, alongside fiscal pressures in more heavily indebted countries, continue to weigh on sentiment.
49%, tracking higher US Treasury yields after stronger-than-expected US inflation data showed consumer prices and core inflation rising more than anticipated in September, increasing the likelihood of a Federal Reserve rate hike this month. Markets now see around a 50% chance of a hike, up from roughly 22% before the report. Meanwhile, ECB President Christine Lagarde said elevated energy-driven inflation has yet to spread across the broader euro-area economy, supporting a wait-and-see approach. However, persistent inflation surprises and the ongoing US-Iran conflict have prompted markets to price in another ECB rate hike in December.
Bond markets have shown tentative signs of stabilization following a global sell-off in late September and early October, but persistent concerns over energy prices, inflation and rising borrowing costs, alongside fiscal pressures in more heavily indebted countries, continue to weigh on sentiment.