The European Central Bank (ECB) appears to be at its conclusion after rates have been halved from 4% down to 2%. Futures are pricing in ~70% possibility of one more cut in the next 18 months. German 10-year Bunds have bounced around between 2% and 3% for almost three years with a fresh catalyst required to send them off in a new direction.
- We have a slight bias towards lower yields in line with our global picture, but it’s not something we would hang our hat on.
MM is neutral towards German Bunds
