German 10-Year Bund Yield Hovers at 9-Month Highs

2025-12-15 11:01 By Joana Taborda 1 min. read

Germany’s 10-year Bund yield held around 2.84% during the final full trading week of the year, hovering near nine-month highs as investors braced for the ECB’s monetary policy decision later in the week.

The ECB is widely expected to keep interest rates unchanged for a 4th meeting, and markets are pricing in roughly a 30% probability of a 25bps rate hike by the end of 2026.

Euro area inflation eased to 2.2% in November, while GDP expanded by 0.3% qoq in Q3.

Most policymakers continue to describe policy rates as being in a “good place” for now.

ECB President Lagarde recently suggested the bank is likely to revise its growth forecasts higher.

Adding further upward pressure on yields, in November German lawmakers approved the 2026 federal budget, ending months of political deadlock and signaling a departure from the long-standing “black zero” balanced-budget policy.

The €524 billion budget includes nearly €180 billion in borrowed funds to finance defense and infrastructure projects.



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