Germany’s 10-year yield hovered around 2%, remaining close to its lowest level since December 14th. Investors digested comments from key central bankers while weaker-than-expected US economic data reinforced expectations that the US Fed will continue to reduce its tightening pace in upcoming meetings. In Europe, ECB President Lagarde warned that the central bank would continue raising interest rates and leave them in restrictive territory for as long as necessary to bring down inflation to its 2% target, hours after Knot saying that markets might be underestimating planned rate hikes by the bloc’s central bank. Earlier in the week, policy council member Rehn had said significant rate hikes were justified in the near term to keep inflation expectations under control, while Francois Villeroy de Galhau said interest rates could peak by the summer. Investors now expect the ECB’s main interest rate to peak at 3.2% in August 2023, below a previous forecast of 3.5%.