Germany’s 10-year Bund yield rose back above 3.3%, rebounding from two-month lows, as oil prices recovered following reports of a US strike on Iran’s Qeshm Island and investors stayed cautious ahead of Tuesday’s US midterm elections. German borrowing costs had fallen in October as a sharp selloff in AI-related stocks pushed investors toward safe-haven assets and markets pared back expectations for additional ECB rate hikes.
However, hawkish comments from ECB officials on Friday—issued just hours after the bank left rates unchanged—signaled that further monetary tightening may have been delayed rather than abandoned, keeping the option of a December rate increase open.
At the same time, Bunds may continue to draw support from expectations of Democratic gains in the US midterms, which could pressure Wall Street and dampen broader risk appetite. Polls currently point to Democrats regaining control of the House of Representatives, while the outcome in the Senate remains uncertain.
