Germany’s 10-year Bund yield stabilized around 3.35% as investors assessed stronger-than-expected US employment data while positioning ahead of next week’s European Central Bank policy meeting. US nonfarm payrolls rose by 162,000 in August, significantly exceeding market expectations for a 56,000 increase and prompting markets to price in a near 58% probability of a Federal Reserve rate hike this month. In Europe, money markets continue to fully price in a 25-basis-point ECB rate hike to 2.5% next week, while assigning an almost 100% probability that the deposit rate will reach 3% by June 2027. This pricing implies two additional rate increases by mid-2027, keeping upward pressure on European borrowing costs. On the economic data front, Germany’s factory orders increased 2.5% in July, slowing from an upwardly revised 3.7% rise in June but comfortably exceeding market expectations for a 0.3% gain.