Bund Yield Unchanged as Mixed Data Leaves ECB Path Unchanged

Germany’s 10-year Bund yield hovered just below 2.7% as investors parsed a mixed set of economic indicators for clues on the ECB’s policy trajectory.

October retail sales fell 0.3%, missing expectations for a 0.2% gain and highlighting persistent weakness in domestic demand.

Inflation held steady at 2.3% in November, slightly below forecasts, while the EU-harmonized rate accelerated to 2.6%, its highest since February and above the ECB’s 2% target.

Earlier in the week, business sentiment data disappointed, though consumer confidence heading into December showed a modest improvement.

Taken together with ECB meeting minutes indicating no urgency to begin easing, the latest figures left market expectations unchanged, with investors still anticipating no rate adjustments through 2026.

Across the Atlantic, softer US economic data and dovish remarks from several Federal Reserve officials strengthened expectations of a third Fed rate cut in December.