According to Jinshi Data, Citigroup's interest rate strategists said that German government bond yields may soon find support. The sell-off before the end of the year may be due to the Federal Reserve's expectation of only two 25 basis point interest rate cuts in 2025, and the European Central Bank may reassess the extent of the interest rate cut.
Meanwhile, the market made room for a large amount of eurozone government bond issuance that was brought forward in January. Given that higher outright yields have created room for supply, Citi suspects that most of the selling may be over.
