A POSITIVE NEW PARADIGM FOR EUROPE 3/3

Following the latest key rate cut, the German yield curve remains slightly upward sloping, with 10-year yields at 2.7%. The likelihood of further easing in short-term rates is increasingly tied to a continued fall in inflation and a weakening economic outlook. Real yields, which are the return on a bond after accounting for inflation, are currently close to zero for Germany. This environment offers a positive but moderate outlook for investors.