FX.co ★ Bund Yields Remain Close to 1-Month High

Germany's 10-year Bund yield eased to 2.66% following a fleeting rise to a one-month peak of 2.68% earlier on Thursday, as concerns continued to loom over the country's economic prospects. The September figures for German industrial production did not meet expectations, while the Bundesbank issued a warning regarding increasing risks to financial stability. Market participants also evaluated statements from European Central Bank (ECB) officials after last week's decision to maintain interest rates. François Villeroy de Galhau emphasized the necessity for the ECB to remain open to various policy strategies, while Joachim Nagel highlighted the importance of staying alert to inflation risks and warned against complacency. Vice President Luis de Guindos remarked that any decrease in inflation below the 2% threshold would likely be temporary. Currently, money markets are indicating roughly a 45% probability of a rate cut by September 2026, a significant drop from the previous estimation of over 80% in October. In the meantime, in the United States, the prospect of a Fed rate cut in December gained traction after Challenger data revealed layoffs reaching a 20-year high for October, which counterbalanced the stronger ADP and ISM figures released the day prior.