Bund Yields Rebound From Two-Month Lows
Germany’s 10-year Bund yield climbed back above 3.3%, recovering slightly from two-month lows, as oil prices rebounded following reports of a US strike on Iran’s Qeshm Island and investors remained cautious ahead of Tuesday’s US midterm elections. German borrowing costs declined in October as a selloff in AI-related stocks drove investors towards safe-haven assets, while markets scaled back expectations for further ECB rate hikes. However, hawkish comments from ECB officials on Friday, hours after the bank left rates unchanged, suggested that monetary tightening may have been postponed rather than ruled out, keeping the possibility of a December rate hike on the table. Meanwhile, Bunds could continue to find support from expectations of Democratic gains in the US midterms, which may weigh on Wall Street and broader risk appetite. Polls favor Democrats to regain control of the House of Representatives, while the outcome of the Senate race remains uncertain.
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Germany’s 10-year Bund yield climbed back above 3.3%, recovering slightly from two-month lows, as oil prices rebounded following reports of a US strike on Iran’s Qeshm Island and investors remained cautious ahead of Tuesday’s US midterm elections. German borrowing costs declined in October as a selloff in AI-related stocks drove investors towards safe-haven assets, while markets scaled back expectations for further ECB rate hikes. However, hawkish comments from ECB officials on Friday, hours after the bank left rates unchanged, suggested that monetary tightening may have been postponed rather than ruled out, keeping the possibility of a December rate hike on the table.
Meanwhile, Bunds could continue to find support from expectations of Democratic gains in the US midterms, which may weigh on Wall Street and broader risk appetite. Polls favor Democrats to regain control of the House of Representatives, while the outcome of the Senate race remains uncertain.