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2025-12-18 17:09:53
[US-Germany Yield Spread Approaching 2023 Lows: A "Stress Meter" for Global Capital Flows] ⑴ Despite further deterioration in US stock market sentiment, the German bond market saw no significant buying interest, remaining range-bound throughout the day. ⑵ In contrast, the European STOXX 600 index performed relatively strongly, a divergence between markets warranting attention. ⑶ Against this backdrop, the yield spread between 10-year US and German government bonds has returned to lows, currently reaching its narrowest level since June 2023, when it narrowed to 122 basis points. ⑷ Looking back at 2023, this spread widened sharply after hitting a low of 99 basis points. Under the current market structure, the possibility of it testing similar low levels again before 2026 cannot be ruled out. ⑸ This continued narrowing of the spread reflects relative changes in transatlantic economic growth and monetary policy expectations, becoming a key indicator for observing global capital allocation preferences.
