German Bonds Expected To Stabilize Amid Fed Rate Decision

According to PANews, Commerzbank's interest rate strategist Rainer Guntermann indicated that German bonds might stabilize early this week as the market anticipates the Federal Reserve's rate decision on Wednesday. Guntermann noted that the potential for further declines in yields appears limited due to high front-end valuations and optimistic anti-inflation expectations. The currency market remains divided on whether the Federal Reserve will begin its rate-cutting cycle with a 25 or 50 basis point reduction. Commerzbank economists predict a 25 basis point cut, emphasizing that the Fed's primary goal will be to initiate the rate-cutting process, which could be followed by a series of reductions. According to Tradeweb data, the yield on 10-year German bonds fell by 1 basis point to 2.141%.