Bund Yields Rebound From Two-Month Lows

Germany’s 10-year Bund yield rebounded above 3.3%, recovering from near two-month lows and tracking higher US Treasury yields ahead of Tuesday’s US midterm elections. German borrowing costs declined in October as a selloff in AI-related stocks drove investors towards safe-haven assets, while markets scaled back expectations for further ECB rate hikes. However, hawkish comments from ECB officials on Friday, hours after the bank left rates unchanged, suggested that monetary tightening may have been postponed rather than ruled out, keeping the possibility of a December rate hike on the table. Meanwhile, Bunds could continue to find support from expectations of Democratic gains in the US midterms, which may weigh on Wall Street and broader risk appetite. Polls favor Democrats to regain control of the House of Representatives, while the outcome of the Senate race remains uncertain.

Germany’s 10-year Bund yield eased to 3.3%, touching its lowest level since late August, as renewed declines in oil prices supported bond markets despite persistent concerns over Europe’s fiscal outlook, which were reinforced by Fitch Ratings’ decision to revise France’s outlook to negative in an unscheduled review last week. Brent crude fell below $110 a barrel following reports that US President Donald Trump was willing to give diplomatic efforts with Iran more time before considering renewed military strikes after Tuesday’s midterm elections, which could reshape the balance of power in Congress. Meanwhile, the European Central Bank kept interest rates unchanged on Thursday, offering limited guidance on its future policy direction. President Christine Lagarde confirmed that a rate hike had been discussed, but policymakers unanimously opted to hold borrowing costs steady, citing tighter financial conditions as one factor helping to contain inflationary pressures.

Germany 10 Year Government Bond Yield decreased to 3.31%, the lowest since August 2026. Over the past 4 weeks, Germany 10Y Bond Yield lost 20.86 basis points, and in the last 12 months, it increased 67.47 basis points.