FX.co ★ Bund Yields Edge Higher as Focus Shifts to US Jobs Data

Germany’s 10-year Bund yield inched up to 3.36% on Friday, recovering slightly after a decline in the previous session, as investors awaited fresh signals from US employment data due later in the day and gradually shifted their focus to the European Central Bank’s September 10 meeting. Global bond markets found some relief on Thursday after Federal Reserve Governor Christopher Waller tempered expectations of an imminent Fed rate hike, weighing on the dollar, while the recent surge in oil prices also began to lose momentum. Even so, bond yields remain elevated amid persistent concerns over energy-driven inflation, higher interest rates, and fiscal sustainability in countries such as France and the UK. Money markets continue to fully price in a 25-basis-point ECB rate hike to 2.5% next week, and they are also assigning an almost 100% probability that the deposit rate will reach 3% by June 2027, implying two additional rate increases by mid-2027.