Fresh record low for 10-year bund yields

Germany's 10-year bond yields

Yields fell to a record low of -0.623% as we begin the day, after seeing Germany's quarterly economic growth contract yet again.

The only positive from the report earlier is that annual estimates held up better-than-expected but it will do little to change the fact that this basically raises expectations for the ECB to introduce more stimulus next month.

The OIS market is pricing in a ~62% probability of a 10 bps cut with the remaining ~38% arguing for a 20 bps cut in the deposit facility rate.

As for today, expect the continued pressure on yields to be the driving force behind other market movements. Treasury yields are also still weaker as such, with 10-year yields down by 3.1 bps at 1.672% currently.

That is still keeping the yen on the front foot with USD/JPY lingering around 106.40 now.