Global Markets Tread Carefully Amid Economic Uncertainty

The financial world faced heightened caution as Germany's 10-year bond increased in appeal following weak U.S. economic data, causing a shift in global risk sentiment. European and U.S. markets experienced setbacks, fostering a preference for safe-haven assets like German bonds amidst Federal Reserve policy debate.

Bonds reacted inversely to movements, with Germany's 10-year bond yield dropping by 1.5 basis points, acting as a euro zone benchmark. Concurrently, France's 10-year bond shows a smaller drop, increasing the yield gap between the French and the safer German bonds.

In light of an uneventful ECB meeting, euro zone markets are taking cues from the U.S. after Federal Reserve’s divergent economic evaluations. With the U.S. government shutdown causing data gaps, attention shifted to a concerning survey on U.S. manufacturing, impacting market perceptions and leaving investors uncertain.