German Bond Yields Plummet Amid Weak U.S. Economic Data and Global Growth Fears

German government bond yields hit a six-month low as investors moved towards sovereign debt following disappointing U.S. economic data. The fall in bond yields was driven by a drop in job growth and rising unemployment in the U.S., alongside concerns over global economic stability and rising geopolitical tensions.

German government bond yields tumbled to a six-month low on Friday as investors sought safer assets after weak U.S. economic data raised fears about global growth and triggered a sharp decline in stock markets.

Data revealed the U.S. added just 114,000 jobs in July, falling short of the expected 175,000, while unemployment rose to 4.3%. In the euro zone, Germany's 10-year bond yield fell 10 basis points to 2.151%, the lowest since February, extending a weekly decline of 25 bps, the largest drop since mid-June.

Experts attribute the trend to a combination of factors, including a dovish Bank of England rate cut, market expectations for Federal Reserve rate cuts, geopolitical tensions in the Middle East, and lower European bond supply. These dynamics have bolstered demand for European bonds, while riskier bonds in Italy and France have underperformed.

(With inputs from agencies.)