Eurozone Bond Yields Rising Amidst Volatility Easing
Eurozone government bond yields increased as rate volatility eased, with the European Central Bank expected to hold rates until 2026. Germany's benchmark 10-year yield rose slightly. Market expects ECB to maintain higher policy rates. Consumer sentiment in Germany might improve. French unions continue protests against austerity measures.
Amid easing rate volatility, Eurozone government bond yields saw a minor rise on Thursday. This comes as expectations strengthen for the European Central Bank to keep rates unchanged until 2026. Germany's key 10-year bond yield increased by one basis point, standing at 2.76%.
With traders pricing in a 40% chance of rate cuts by July, predictions suggest a potential decrease in the depo rate to 1.75%, with key rates possibly at 1.97% by the end of 2026. Despite this, consumer sentiment in Germany could show slight improvements as October approaches, though it remains negative.
In a stable U.S. Treasury market, the 10-year yield remained flat at 4.15% in early London trades. Meanwhile, France's OAT yields saw a marginal rise, prompted by impending union-led strikes demanding policy change against austerity measures set by Prime Minister Sebastien Lecornu's predecessor.
(With inputs from agencies.)
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