Bund Yields Ease but September Losses Remain Steep

2026-09-30 08:38 By Joana Ferreira 1 min. read

Germany’s 10-year Bund yield fell toward 3.55% at the end of September, moving away from a 17-year high of 3.65% reached earlier in the week, as markets became more cautious about further central bank rate hikes.

Still, Bunds suffered a sharp selloff over the month, with yields rising 27 bps, driven by higher energy costs fueling inflation concerns and expectations that the AI boom could support growth, reinforcing bets on higher-for-longer interest rates.

Political uncertainty ahead of elections in France, Spain and Italy next year also kept pressure on bonds.

Meanwhile, the tone improved on Wednesday as central bankers pushed back against expectations of rapid and sustained tightening.

ECB official Peter Kazimir said that the central bank has time to keep policy flexible after two rate hikes this year, echoing President Christine Lagarde’s comments earlier this week.

In the US, Fed's John Williams similarly said there was time to assess incoming data before raising rates again.



News Stream
Bund Yields Ease but September Losses Remain Steep
Germany’s 10-year Bund yield fell toward 3.55% at the end of September, moving away from a 17-year high of 3.65% reached earlier in the week, as markets became more cautious about further central bank rate hikes. Still, Bunds suffered a sharp selloff over the month, with yields rising 27 bps, driven by higher energy costs fueling inflation concerns and expectations that the AI boom could support growth, reinforcing bets on higher-for-longer interest rates. Political uncertainty ahead of elections in France, Spain and Italy next year also kept pressure on bonds. Meanwhile, the tone improved on Wednesday as central bankers pushed back against expectations of rapid and sustained tightening. ECB official Peter Kazimir said that the central bank has time to keep policy flexible after two rate hikes this year, echoing President Christine Lagarde’s comments earlier this week. In the US, Fed's John Williams similarly said there was time to assess incoming data before raising rates again.
2026-09-30
German Bund Yields Hold Near 17-Year High
Germany’s 10-year Bund yield edged down to 3.6% after reaching its highest level since June 2009, as investors weighed ECB President Christine Lagarde’s comments against fresh inflation data and elevated oil prices. Lagarde said the recent inflation surge has yet to produce significant second-round effects, pointing to a measured policy response. Meanwhile, the eurozone’s subdued growth outlook, with GDP expected to expand just 0.9% this year, could limit the scope for aggressive ECB tightening. Political uncertainty ahead of elections in France, Spain and Italy next year also kept pressure on bonds. However, with inflation above 3% and potentially approaching 4% by year-end, markets are pricing in up to four additional rate hikes over the next year, with tightening expected to resume in December when new projections are released. In the US, markets are increasingly pricing in another rate hike as soon as October.
2026-09-29
Bund Yields Hold at 17-Year High as Lagarde Signals Caution, Oil Rises
Germany’s 10-year Bund yield trimmed an early rise to stabilize at 3.62%, its highest level since June 2009, as investors weighed comments from ECB President Christine Lagarde against a renewed rally in oil prices. Lagarde said the inflation outlook for 2027 and 2028 is now higher than policymakers expected a few months ago, mainly due to higher energy prices, but noted there is no evidence yet of energy costs feeding into higher wages. She added that while the shock is too significant to ignore, a measured policy response remains appropriate to keep inflation under control. Meanwhile, oil prices climbed after President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end the conflict in the Middle East. Money markets are pricing in roughly 100 basis points of ECB rate hikes by the end of 2027, while investors now await key eurozone inflation data due later this week for further clues on the ECB’s monetary policy outlook.
2026-09-28