German bund yields down on weak economic figures

Germany’s 10-year Bund yield fell to 2.68%, its lowest level since September 17, as investors digested disappointing German industrial data and monitored political uncertainty in France and the United States.

German industrial production slumped 4.3% month-on-month in August—the steepest drop since March 2022 and far worse than expectations of a 1% decline—driven primarily by a sharp contraction in the automotive sector.

In France, political tensions deepened as President Emmanuel Macron faced growing pressure to call early elections or resign following the abrupt departure of Prime Minister Sébastien Lecornu.

Lecornu began two days of talks aimed at stabilizing the government and securing parliamentary approval for the 2026 budget. While he downplayed the prospect of dissolving the National Assembly, markets viewed the negotiations as a test of France’s political stability.

Meanwhile, in the United States, the prolonged government shutdown continued to weigh on risk sentiment.

Investors fear that disruptions to economic data releases could complicate the Federal Reserve’s policy assessment and delay key decisions on interest rate cuts later this year.