Europe’s Bond Rally Shows How Economic Cracks Are Spreading
- German 10-year yield set for biggest weekly drop since March
- Cooling CPI, weak China data point to rate hikes ending soon
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European government bonds rallied while the euro and risk-sensitive Nordic currencies sank as cooling inflation prints and weak Chinese data spurred wagers the rate-hike cycle is nearing its end.
The yield on Germany’s 10-year benchmark note headed for its biggest weekly decline in more than two months as government bonds across the region climbed after slower-than-anticipated inflation readings for France and Germany. Money markets pared bets on additional rate hikes by the European Central Bank.