FX.co ★ German Bund Yields Hit Two-Week High as Debt Issuance Rises

German 10-year Bund yields approached 2.75%, marking their highest point since September 2, following a tumultuous week influenced by increased debt issuance plans and key decisions from major central banks. On Thursday, the German finance agency revealed that fourth-quarter issuance will rise by €15 billion compared to its December projection, attributing the increase to heightened spending needs for infrastructure and defense. Agency head Tammo Diemer emphasized strong investor appetite for Bunds, partly fueled by France's ongoing budget crisis. Concurrently, protests continued across France against government spending cuts, and Italy is anticipated to receive a credit rating upgrade from Fitch later on Friday. In terms of monetary policy, the Bank of Japan maintained interest rates but indicated a gradual reduction in its holdings of ETFs and REITs, suggesting a possible earlier-than-anticipated shift away from monetary stimulus. Earlier this week, the Federal Reserve reduced borrowing costs for the first time since December, while the Bank of England kept rates unchanged.