Bund Yields Near Two-Month Lows

Germany’s 10-year Bund yield eased to around 3.34%, touching its lowest level since August 31, as investors sought safe-haven assets amid mounting fiscal concerns and political uncertainty in France and other highly indebted eurozone economies. Meanwhile, fresh PMI data showed eurozone private-sector growth slowed to a four-month low in October, pressured by rising energy costs, higher interest rates and renewed contraction in France. Consumer confidence also deteriorated more sharply than expected. French bonds remained under particular pressure, with the spread between French OATs and German Bunds widening to around 170 basis points, its highest level since the eurozone sovereign debt crisis. Looking ahead, further demonstrations are expected across the region this weekend, while investors await next week’s inflation data and the ECB’s policy meeting, where officials are widely expected to leave interest rates unchanged.

Germany’s 10-year Bund yield held around 3.4%, supported by safe-haven demand, while French and other highly indebted euro-area bonds remained under pressure from fiscal concerns and political uncertainty. The spread between French OATs and German Bunds widened to around 170 basis points, its highest level since the eurozone sovereign debt crisis. Global bond yields have risen this year amid surging energy prices and expectations of tighter monetary policy. France has come under particular pressure, with its 10-year bond yield reaching a fresh 24-year high amid mounting fiscal concerns and social unrest. Anti-government protests and budget negotiations in a deeply divided Parliament have raised doubts about the government’s ability to implement deficit-reduction measures ahead of the 2027 presidential election.

Germany’s 10-year Bund yield retreated toward 3.4% amid safe-haven buying, while French and other highly indebted euro-area sovereign bonds remained under pressure from social unrest and growing budgetary concerns The 10-year OAT-Bund spread widened beyond 150 basis points, reaching its highest level since the eurozone sovereign debt crisis. In France, anti-government protests and budget negotiations in a deeply divided Parliament have raised doubts about the implementation of austerity measures ahead of next year’s elections. Italy also announced plans to deploy 500 troops following days of unrest. Meanwhile, geopolitical tensions escalated after Ukrainian President Volodymyr Zelenskyy accused US President Donald Trump of pressuring Kyiv to make concessions to Russia. Persistent inflation concerns amid a rebound in oil prices, and expectations that interest rates will remain elevated for longer, continued to weigh on broader market sentiment.