The yield on Germany's 10-year Bund rose above 2.33%, nearing an eight-week high as investors look ahead to crucial economic data that could influence monetary policy.
German bund yield nears eight-week high
The GfK survey showed continued improvement in German consumer sentiment for November; however, financial expectations for the next year have declined for the third consecutive month. Looking forward, Eurozone GDP for Q3 is expected to grow by 0.2%, with France and Italy anticipated to see growth rates of 0.4% and 0.3%, respectively, while Germany may contract by 0.1%. Eurozone inflation is projected to rise slightly to 1.9%, primarily driven by Germany's rate of 1.8%.
ECB deposit rate expected to drop to 2% by mid-2025
Market forecasts indicate that the ECB’s deposit rate could decrease to 2% by mid-2025, with a potential rate cut in December, although the magnitude of this cut remains uncertain. Meanwhile, investor sentiment has improved as Israel’s strikes on Iran avoided hitting critical infrastructure, alleviating immediate concerns of escalation.
