Germany’s 10-year Bund yield hovered around 2.85% as investors assessed the European Central Bank’s policy stance and looked ahead to key data releases, including the closely watched US labor market and CPI reports. At its meeting last week, the ECB kept interest rates unchanged and reiterated that inflation is expected to return sustainably to its 2% medium-term target.
President Christine Lagarde adopted a measured tone, stating that the euro area’s inflation outlook remains in a “good place” while downplaying concerns over the recent appreciation of the single currency. She cautioned that incoming data may be volatile in the coming months and should not be interpreted in isolation when formulating monetary policy.
Markets also digested the announcement that Bank of France Governor François Villeroy de Galhau will step down on June 1, 2026, ahead of the official end of his mandate scheduled for autumn 2027.
