FX.co ★ Bund Yield Holds Steady as Investors Weigh Key Data and Policy Outlook

The yield on the German 10-year Bund concluded the month of May at 2.5%, maintaining proximity to its lowest point since May 8. This movement comes amidst investors analyzing a suite of economic indicators and their potential ramifications on the monetary policy direction of the European Central Bank. Domestically, German retail sales experienced a 1.1% decline in April compared to the previous month, marking the first decrease in four months and a notable departure from the anticipated 0.2% rise. Concurrently, regional CPI data presented a mixed picture in anticipation of the upcoming national inflation report. In May, inflation in Bavaria remained stable at 2.1%, while Baden-Wuerttemberg saw a reduction to 2.2% from 2.4%. Conversely, North Rhine-Westphalia witnessed an increase to 2.0% from 1.8%, and in Lower Saxony, the rate climbed slightly to 2.3% from 2.2%. Projections indicate that German inflation likely decelerated to 2.0% in May from April's 2.1%. Additionally, broader market sentiments were tempered by news of an appeals court temporarily halting the block on former President Trump's trade tariffs.