German Bund yield set to rise to 0.25% by year-end: NatWest Markets

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LONDON, May 12 (Reuters) - Germany's 10-year Bund yield is likely to rise to 0.25% by the end of the year, with markets still too pessimistic on the economic outlook, NatWest Markets said in a note on Wednesday.

While the 10-year German bond yield, trading at -0.16% is near its highest levels since March 2020, reflecting increased expectations for a rebound in growth and inflation, it remains firmly mired in negative territory.

But analysts at NatWest said markets are still pricing in too much of a "pessimism premium" into eurozone bond markets.

"Most countries are now starting to relax restrictions on the planned timelines," they said in a note. "We expect full opening of economies on a similar timeline to the UK and the US, which should support the strong economic rebound that we expect in H2." (Reporting by Dhara Ranasinghe; Editing by Saikat Chatterjee)

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