Germany’s 10-year Bund yield fell 2 basis points to 3.47% on Monday as energy prices were mixed. The French-Bund yield spread widened 3 basis points to 141.50, while the Italian spread stood at 109 basis points.
Germany’s 10-year government bond yield, the euro area benchmark, fell 2 basis points to 3.47%, while the two-year yield slipped 0.5 basis points to 3.09%. The French-OAT spread over Bunds widened 3 basis points to 141.50 basis points, after reaching 158.67 earlier in October; Italy’s spread was 109 basis points.
Energy prices were mixed after U.S. President Donald Trump announced an energy-related ceasefire between Russia and Ukraine. Investors were betting that Middle East tensions would remain contained, reducing the risk of an energy price spike. Money markets priced the European Central Bank deposit rate at 2.72% by December, up from 2.50%, and 3.20% by late 2027. Investors’ focus was set to shift to U.S. economic data due Tuesday; Commerzbank strategist Erik Liem said a strong reading could bolster expectations of a December Federal Reserve hike.
