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2025-10-31 01:16:34
[German Bond Yields Rise as Traders Believe ECB May Not Need Further Rate Cuts] German bond yields rose on Thursday as traders further bet that the European Central Bank (ECB) would keep interest rates stable after the bank held its policy unchanged for the third consecutive time and signaled a more optimistic outlook for economic resilience and growth. Since launching its easing cycle in June 2024, the ECB has cut interest rates by a total of 200 basis points, currently maintaining its deposit rate at 2%. ECB President Christine Lagarde reiterated that the ECB is currently in a "good position." The market generally believes that the ECB is more likely to keep rates unchanged in this cycle than to cut them further. Traders currently expect only about 10 basis points of room for rate cuts by mid-2026, equivalent to a probability of about 40% for another 25 basis point cut, down from 50% on Monday. Elias Haddad, senior market strategist at Brown Brothers Harriman, noted, "From a monetary policy perspective, the ECB is in a 'Goldilocks' ideal position—inflation and the economic situation in the Eurozone both support its continued hold."
