The yield on Germany's 10-year Bund has increased to 2.4%, reflecting investor concerns over economic uncertainties and potential adjustments in European Central Bank (ECB) policy.
German 10-year Bund yield edges up
In contrast, US Treasury yields remain stable near recent highs, as expectations for ECB actions are dampened by a sluggish economic outlook. Key economic indicators due later this week, including Euro Area wage data on Wednesday and PMI reports on Friday, may further impact market sentiment. Currently, markets have priced in an ECB deposit rate of 1.9% by July 2024, with expectations of a 25 basis-point rate cut in December. There is also a 20% probability of a more substantial 50 basis-point reduction.
Analysts' outlook on US yields
Meanwhile, in the US, analysts anticipate yields will remain steady in the near term. Markets are already factoring in a scenario where a potential "red sweep" — Donald Trump winning the presidency with Republican control of Congress — could drive policies that stimulate inflation, ultimately leading to higher interest rates.
