German Bonds Slide Amid Weak Economic Data

German government bond yields experienced a fourth consecutive weekly decline following weak economic data from both the U.S. and Europe, alongside dovish signals from the Federal Reserve. Investors are now focusing on the U.S. non-farm payrolls report. This trend has widened yield spreads in Italian and French bonds.

German government bond yields are poised for their fourth straight weekly decline, driven by lackluster economic data from both sides of the Atlantic and dovish signals from the Federal Reserve.

Investors are awaiting the U.S. non-farm payrolls report for further insights into the health of the economy. Concerns about a potential global economic downturn have caused riskier government bonds to underperform, leading to wider yield spreads for Italian and French bonds compared to Bunds.

Bund yields, the euro zone benchmark, fell by 2 basis points to 2.23%, marking a 17 basis point drop for the week, the largest since mid-June. U.S. Treasury yields are also down, influenced by weak economic data and dovish comments from Federal Reserve Chair Jerome Powell. The money markets have fully priced in over 70 basis points of European Central Bank rate cuts in 2024, suggesting multiple easing moves.

(With inputs from agencies.)