Germany’s 10-year Bund yield remained below 2.75%, hovering near Monday’s two-and-a-half-month low of 2.725%, as investors weighed reports that European Central Bank President Christine Lagarde may leave her post earlier than expected. According to the Financial Times, Lagarde is considering stepping down before France’s 2027 presidential election, although no timetable has been set.
An early departure would position French President Emmanuel Macron, who is constitutionally barred from seeking a third term, and German Chancellor Friedrich Merz as key power brokers in choosing her successor.
European bond yields have also come under downward pressure from moves in US Treasuries, after weaker-than-anticipated US inflation data on Friday and growing market unease over potential AI-related disruptions in equity markets, both of which have bolstered demand for government bonds.
