German Bond Yields Hit Record Lows Amid Global Economic Concerns

German government bond yields reached their lowest in over a year as investors turned to sovereign debt due to weak U.S. economic data and falling global stocks. Weak job growth in the U.S. and other economic indicators increased expectations of Federal Reserve rate cuts, impacting bond yields across Europe.

German government bond yields plummeted to their lowest levels in over a year on Friday, driven by investor demand for sovereign debt in response to dismal U.S. economic data. The U.S. economy's addition of only 114,000 jobs in July, well below expectations, stoked fears of global economic slowdown, causing stocks to nosedive.

Germany's two-year bond yield plunged over 12 basis points to 2.326%, its lowest since March 2023, while the 10-year yield, a euro zone benchmark, fell to 2.149%, the lowest since January. Torsten Slok, Apollo Global Management's chief economist, revised his forecast to predict a Fed rate cut in September, citing weakening inflation and labor market conditions.

Further data showed U.S. jobless claims rose to a high of 249,000, while global stocks dropped, with a pan-European index and the U.S. S&P 500 down significantly. European bond yields, particularly in Italy and France, varied in response to geopolitical uncertainties and economic factors, reflecting broader concerns over the global economy.

(With inputs from agencies.)