Stable Condition: German Government Bonds Stabilize After Losses

After a tumultuous trading session last Friday, which resulted in significant losses for German government bonds, the market appeared largely unchanged at the start of this week. The focus of trading was on the Euro Bund Future, which saw a slight decline of 0.13 percent to close at 134.81 points. In conjunction, the yield on the ten-year German federal bonds took a breather at 2.24 percent. The backdrop to this development were the robust figures from the U.S. job market, which had given the markets fresh momentum on Friday. Strong growth in employment and rising wage trends reinforced the belief that interest rate cuts are not currently on the agenda in the U.S. The vigorous labor market thus underlines interest rate expectations and, at the same time, pushed down the prices of government bonds. The monetary policy sentiment was further confirmed by comments from Jerome Powell, Chairman of the U.S. Federal Reserve. In an interview with the CBS television network, he classified too rapid an easing of monetary policy as a risk. The conversation with Powell, which significantly influenced the interest rate landscape, was recorded last week and broadcast on Sunday in the U.S. The Fed Chair emphasized the ongoing task of the Federal Reserve to combat high inflation, thereby confirming his previous stance.