Bund Yields Surge Amidst ECB's Strategic Moves: Market Reactions Unfold

Bund yields are experiencing their largest weekly increase since April, following the ECB's less-than-expected dovish policy stance. Despite cutting rates, the ECB's future policy remains unclear. The market's focus is on Monday's ECB President speech and purchasing manager surveys, with U.S. rate expectations influencing European debt markets.

Bund yields have experienced a significant weekly rise, the highest since mid-April, in response to the European Central Bank's reluctance to accelerate rate cuts during its recent policy meeting.

Despite a fourth rate cut this year, ECB President Christine Lagarde offered limited insights into future policy directions, prompting investors to adjust their expectations. The market is now focused on the ECB President's upcoming speech and the release of purchasing manager surveys scheduled for Monday.

French politics also captured attention as President Emmanuel Macron appointed Francois Bayrou as the fourth prime minister of 2024, with key fiscal decisions looming next year.

(With inputs from agencies.)