Analyst: Eurozone government bond yield curve expected to steepen.

Metzler analyst Leon Ferdinand Bost stated in a report that the yield curve of Eurozone government bonds is expected to steepen. The two-year yield of German government bonds suggests a terminal rate of 2% for the European Central Bank, but Metzler believes that the market is underestimating the possibility of rate cuts by the ECB. The analyst stated: "Because we believe that risks of growth and inflation are both tilted downward." Meanwhile, driven by the German fiscal plan, the yield of 10-year German government bonds is expected to face upward pressure starting from the second quarter and rise to 2.80% by the end of 2026. Metzler's forecast is only slightly higher than the closing level of 2.749% on Tuesday. However, this yield will increase from around 2.50% in the first quarter, and it is expected that part of this increase is due to rate cuts by the European Central Bank.