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2026-09-18 17:40:14
[German 2-year vs. 10-year yield spread is flat, long-term valuations are relatively high] ⑴ The spread between 2-year and 10-year German government bonds has also flattened after directional adjustments. ⑵ Based on the regression of the 3-month constant yield to maturity, the 10-year German government bond is about 7 basis points more expensive than the beta-adjusted 2-year bond, deviating by about 2 standard deviations. ⑶ A similar flattening pattern was previously observed between the 5-year and 10-year maturities, indicating a lack of steep momentum at the long end of the yield curve. ⑷ Market sentiment is cautious, and investors are focusing on whether subsequent economic data and central bank communications can provide directional guidance for the yield curve.
