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German DAX index and global market volatility

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2026-10-02 16:59 UTC → 2026-10-02 18:06 UTC · added ~~removed~~

The German DAX index has demonstrated resilience amid fluctuating economic forecasts and geopolitical tensions. While some economic institutes predict a growth rate of 1.3 percent, others have warned of potential job losses reaching 350,000 by the end of 2027. Despite these mixed outlooks, the Ifo business climate index recently reached its highest level in three years. Global equity markets, including the S&P 500 and Dow Jones, continue to face sustained downward pressure driven by surging U.S. Treasury yields. Recent data shows U.S. 10-year Treasury yields rising to 5.34%, the highest level since 2002. This trend has extended to other major economies, with UK borrowing costs reaching 6% for the first time since 1998, and yields in France and Japan hitting multi-decade highs. In the Eurozone, inflation rose to 3.8% in September, exceeding the 3.6% forecast and increasing pressure on the European Central Bank. This has led to widening sovereign bond spreads; the French 10-year bond spread against Germany reached 150 basis points, its highest level since 2012, while the Greek 10-year spread against the German Bund widened to approximately 110 basis points from roughly 65–70 basis points in early September. Although the Greek market remains more stable than France due to its long-term debt structure and investment-grade status, the surge in borrowing costs is placing pressure on households, corporations, and national budgets. This volatility is attributed to persistent inflation concerns, rising energy costs, and expectations of further central bank interest rate hikes. Increasing government debt levels are also exerting pressure. The International Monetary Fund (IMF) noted that while global bond markets continue to function in an “orderly manner,” energy price shocks and rising yields continue to pose challenges to the global economy.

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