Eurozone Bond Yields Ease Marginally, German Equities Slip 0.3%

Key Moments:

Yields Pull Back Across the Eurozone

Euro area bond yields retreated from multi-week highs, driven by easing trade tensions and anticipation of economic data from the US expected on Thursday. Yields had spiked earlier in the week following remarks from European Central Bank (ECB) officials and optimism around the US-China trade agreement.

The German benchmark 10-year yield fell 1.5 basis points to 2.66% following a climb to 2.694%, its highest mark in several weeks. Meanwhile, Italy’s 10-year yield declined to 3.67%, down from a recent peak of 3.713%. The Italian-German 10-year bond yield spread narrowed to 99 basis points, after briefly touching a multi-year low of 93.80 bps..

Germany Equities Retreat as Corporate Results Weigh

German stocks traded in the red on Wednesday, with the DAX index declining 0.29% to 23,579.11, after touching an intraday low of around 23,447. Investors took a more cautious approach following recent gains driven by an agreement between the US and China on trade and softer-than-expected US inflation data.

Brenntag dragged on the index, tumbling more than 4% earlier in the session after the company posted weaker earnings for the first quarter of its fiscal year. Pre-tax profit came in at €192.7 million, €12.3 million lower than last year. Net profit also dropped, falling to €134.4 million, or €0.93 per share. This marked a decline from 2024’s €141.4 million and €0.97 per share.

Shares of Bayer surrendered recent gains that were backed by strong financial results and sank by over 7% on profit-taking. This made Bayer the worst-performing stock on the index. Qiagen’s share price also dropped, albeit by a far softer 1.20%.

Other Component Highlights

Multiple large-cap stocks were under pressure, with Mercedes-Benz, BMW, Siemens, Volkswagen, BASF, and Porsche being among the companies whose shares declined between 1% and 2%.

In contrast, DAIMLER TRUCK jumped over 2%, as did HEIDELBERG MATERIALS. E.ON also rose 1.5% after reporting that its adjusted group net income increased to 1.3 billion euros in the first quarter of 2025, up from 1.0 billion euros in the previous year. In addition, E.ON rose more than 1% after disclosing that its adjusted group net income in Q1 2025 surpassed last year’s €1 billion, climbing to €1.3 billion.

Defense and financial names fared well, with Rheinmetall advancing 1.5%, while Deutsche Boerse, Munich RE, Deutsche Telekom, and Porsche Automobile Holding also rose.

Inflation Cools in Germany

Final data from Germany’s Federal Statistical Office (Destatis) confirmed that consumer price inflation slowed substantially in April. The consumer price index (CPI) rose 2.1% YoY, down from March’s 2.2% and the lowest in six monthsInflation measured by the harmonized index of consumer prices (HICP) extended its easing streak, coming in at 2.2%, 0.1% from the month prior.