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2025-09-15 17:28:21
[German and US 10-Year Yields Realign: Is Market Risk Aversion Rising?] ⑴ Institutions have noted that the correlation between German and US 10-Year Treasury yields is climbing again, currently nearing its highest point this year. Data shows that the correlation reached 0.81 in the past month, having previously been negative from late June to early July and from late April to early May. ⑵ Notably, the correlation between 10-Year yields was even closer before last year's presidential election, reaching a one-month high of 0.91. The current increase in correlation, particularly amid market concerns stemming from recent geopolitical events and Trump's tariff rhetoric, may signal a creeping rise in risk aversion, with investors aligning with more mainstream risk appetite. ⑶ This reconvergence in yields may reflect a shared flight to safety and a shift away from risky assets in the face of uncertainty. Investors should closely monitor the subsequent developments of this trend, as it could have profound implications for pricing in European and global bond markets.
