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2026-09-16 16:36:08
[German 10-year bond yield hits 3.55%, a 17-year high] ⑴ The yield on German 10-year government bonds rose to 3.55%, the highest level since June 2009, as renewed inflation concerns and the upcoming Federal Reserve decision led investors to increase their bets on further interest rate hikes by the European Central Bank. ⑵ The market is currently pricing in the ECB deposit rate to rise to around 2.9% by December, up from the current 2.5%. ⑶ Looking further ahead, the rate is expected to reach 3.4% by November 2027, fully pricing in a third rate hike and implying a roughly 50% probability of a fourth. ⑷ The ECB raised interest rates for the second time this year last week to curb rising energy-driven inflation, while warning that price pressures could persist. These statements reinforced expectations of further policy tightening. ⑸ Meanwhile, the market expects the Federal Reserve to raise interest rates by 25 basis points, potentially the first rate hike in three years, and is also looking for signals regarding the prospect of further tightening.
