Forex
Bund Yield Holds Steady Amid US Employment Data Surprise
The German 10-year Bund yield held steady around 3.35% as investors digested stronger-than-expected US employment data and positioned for next week's European Central Bank policy meeting.
US nonfarm payrolls rose by 162,000 in August, significantly exceeding market expectations of a 56,000 increase and prompting markets to price in a near 58% probability of a Federal Reserve rate hike this month.
This has put upward pressure on European borrowing costs, as money markets now fully price in a 25-basis-point ECB rate hike to 2.5% next week, with almost a 100% probability that the deposit rate will reach 3% by June 2027.