Germany’s 10-Year Bund Yield May Have Limited Room to Fall Further, Analyst Says

SEB Chief Strategist Jussi Hiljanen said the rally in German government bonds may be nearing an end after the 10-year Bund yield fell to a multi-month low of 2.85%. According to Jin10, Hiljanen said a sustained move below 2.80% would require a clearly more dovish European Central Bank policy outlook, which he said still appeared premature. SEB forecast that the 10-year German Bund yield will rebound to a range of 2.90% to 3.00% ahead of the ECB’s July 23 meeting. Hiljanen added that the longer-term outlook will largely depend on whether markets begin pricing in expectations of further policy rate cuts in 2027.