FX.co ★ German Bund Yield Eases as ECB Holds Rates

Germany’s 10-year Bund yield decreased to approximately 2.85% following the European Central Bank's decision to maintain its interest rates unchanged during its inaugural policy meeting of 2026. This move was in line with widespread expectations. The ECB reiterated its stance that inflation is anticipated to align with its 2% target over the medium term. While acknowledging the euro area's economic resilience, the ECB also expressed concerns over the uncertainties posed by global trade policies and persistent geopolitical tensions. Since June, the ECB has maintained a steady policy, describing its current position as satisfactory, albeit with some officials warning that a significant appreciation of the euro might prompt reconsideration of potential rate cuts. In a separate report, Eurostat revealed that headline inflation decelerated to 1.7% year-on-year in January, aligning with forecasts and marking the lowest figure since September 2024. Meanwhile, core inflation fell to 2.2%, which was slightly below predictions and the weakest recorded since October 2021.