FX.co ★ German Bund Yields Slip as Mixed Data and Fed Caution Weigh on Markets

The yield on Germany's 10-year Bunds decreased slightly to 2.73%, following a recent peak of 2.762% earlier in the week. Investors are closely analyzing new economic data and its potential impact on European Central Bank (ECB) policy. The Ifo Business Climate Index in Germany fell by 1.2 points to 87.7 in September, marking its lowest level since May and coming in below the anticipated 89.3. This decline indicates a dip in business confidence regarding both present conditions and future outlooks. Concurrently, the HCOB PMI survey highlighted Germany's strongest private-sector expansion since May 2024, primarily bolstered by robust services, although the manufacturing sector experienced a steeper downturn than expected. In the United States, Federal Reserve Chair Jerome Powell maintained a careful approach to upcoming interest rate decisions, navigating between ongoing inflation pressures driven by tariffs and emerging signs of a cooling labor market. Additionally, geopolitical tensions escalated as U.S. President Trump expressed optimism about Ukraine's capability to regain all areas currently under Russian control.