FX.co ★ German Bund Yield Slightly Up After Strong Inflation Data

Germany's 10-year Bund yield rose to 2.46% on Friday following Eurozone inflation figures that exceeded predictions. Annual inflation held steady at 2.2% in April, slightly surpassing the anticipated 2.1%, driven by significant increases in service and unprocessed food prices which countered a steeper decline in energy costs. Core inflation also increased to 2.7% from 2.4%, surpassing the expected 2.5%. This development reinforced investor expectations for a 60 basis point reduction in the European Central Bank's interest rates by the end of the year. Globally, the focus shifted to the upcoming U.S. employment report—the first since the Trump administration's announcement of tariffs in early April—to gain further insights on the Federal Reserve’s upcoming decisions. Additionally, signs of a possible easing in U.S.–China trade tensions improved market sentiment, following Beijing’s indication that it is "evaluating" the latest American proposals for renewed discussions.