The yield on the German 10-year Bund edged higher to above 0.9% in the second week of August, after touching a near four-month low in the previous week, as investors increased expectations the ECB will deliver another big rate hike in September. Traders were pricing in a roughly 95% chance of a 50 bps rate hike at the ECB's meeting next month, compared to a 50% chance last week, according to Refinitiv. Still, the economic outlook for Germany and the Euro Area remains subdued, with recent PMI data pointing to a contraction in private sector activity in July. Yet, the gap between 2 and 10-year yields for Germany is around the flatline, which usually predicts an economic slowdown.
Historically, the Germany Government Bond 10Y reached an all time high of 9.13 in September of 1990. Germany Government Bond 10Y - data, forecasts, historical chart - was last updated on August of 2022.
The Germany Government Bond 10Y is expected to trade at 1.06 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.41 in 12 months time.