German 2-Year Yield Rises Over 5bps This Week; 10-Year Up 1.9bps

The front end led this week's move, with the 2-year yield gaining more than the 10-year and the 2s/10s spread narrowing toward 35bps. That is a flattening signal: the market is repricing near-term rate expectations rather than long-run growth or inflation. It matters because German Bunds anchor euro-area sovereign curves, so a front-end-led rise feeds quickly into peripheral spreads and the euro. Whether the 2-year holds above 3% is the open question; a reversal there would suggest the move was positioning, not a shift in the policy path.