FX.co ★ German Yields Stabilize at Two-Week Low

Germany's 10-year Bund yield remained stable at 2.67%, marking its lowest point since November 12. Investors are closely monitoring Friday's preliminary inflation data from Europe's largest economies to gain insight into the European Central Bank's (ECB) future policy direction. Recent data from Germany has presented a mixed economic picture: November's business sentiment was disappointing, consumer confidence saw a slight uptick moving into December, and third-quarter GDP figures confirmed economic stagnation. The lackluster economic performance, hampered by declining exports and tepid private consumption, has raised concerns about Germany's growth outlook; however, it has not significantly altered expectations regarding ECB policy. Generally, the market continues to anticipate that interest rates will remain unchanged until 2026. In contrast, in the United States, the likelihood of a December rate cut by the Federal Reserve has surged to over 80%. This shift is fueled by weaker-than-anticipated economic data and dovish statements from several Fed officials, bolstering expectations of another policy easing next month.