03.02.202609:59:07UTC+00German 10-Year Bund Yield Nears March 2025 High

Germany's 10-year Bund yield rose to 2.88%, approaching the March 2025 high of slightly above 2.9%. Investors are considering the potential effects of the surprise nomination of former Federal Reserve governor Kevin Warsh as the new Fed Chair by President Trump, which indicates a more hawkish stance. Simultaneously, focus is on the upcoming European Central Bank (ECB) meeting, where policymakers are anticipated to evaluate the deflationary effects of a strengthened euro. Recently, ECB policymaker Martin Kocher warned that further appreciation of the euro might lead to the reintroduction of interest-rate cuts. The euro soared to a 4½-year peak exceeding $1.20 at the close of January, following President Trump's comments dismissing concern over the dollar's recent depreciation. Currently, money markets estimate about a 20% probability of an ECB rate cut in September and a 30% likelihood of a rate increase in April 2027.