Germany 10-Year Yield Falls After Disappointing US Jobs Data

Germany’s 10-year Bund yield rebounded to 2.8% after briefly hitting a four-week low of 2.793%, as investors scaled back expectations for Federal Reserve rate cuts following stronger-than-expected US employment data. US payrolls rose by 130,000 in January, the largest gain in over a year, while the unemployment rate unexpectedly fell to 4.3%, pointing to continued labor market resilience at the start of 2026. Markets now fully price in a Fed rate cut by July instead of June, with the probability of a March move seen below 5%. In Europe, investors also assessed signals that the European Central Bank remains largely comfortable with the euro’s recent appreciation, as well as reports that Bank of France Governor François Villeroy de Galhau, considered dovish, will step down earlier than planned. ECB President Christine Lagarde said last week that the inflation outlook remains in a “good place,” while downplaying concerns over the strength of the single currency.

Germany’s 10-year Bund yield fell below the 2.8% mark, hitting its lowest level since January 14, as investors awaited the delayed US jobs report for fresh signals on the Federal Reserve’s policy path. The employment data is expected to show a modest rebound in job growth in January, aided by fewer layoffs in some seasonal sectors. However, uncertainty persists after several US officials, including White House economic adviser Kevin Hassett, cautioned that hiring could weaken in the months ahead. In Europe, markets also digested indications that the European Central Bank is largely unconcerned about the euro’s recent appreciation, alongside reports that Bank of France Governor François Villeroy de Galhau, viewed as a policy dove, will step down earlier than previously expected. ECB President Christine Lagarde struck a balanced tone last week, saying the euro area’s inflation outlook remains in a “good place” while playing down concerns over the single currency’s strength.

Germany 10 Year Government Bond Yield decreased to 2.80%, the lowest since January 2026. Over the past 4 weeks, Germany 10Y Bond Yield gained 0.34 basis points, and in the last 12 months, it increased 37.78 basis points.