(Bloomberg) -- The yield on 10-year German debt fell to a one-year low as expectations of interest-rate cuts next year continue to boost bonds.

The rate fell six basis points to 1.92%, the lowest since December 2022, after recently breaching the 2% level for the first time since March. 

German bonds have been on a rally since late October as soft euro-area economic data and a slowdown in inflation suggest European Central Bank policymakers won’t hold rates high for much longer. 

Money markets imply 168 basis points of cuts from the ECB next year, which means six quarter-point reductions are fully priced and there’s a 70% chance of a seventh one. That compares to bets on just three cuts about a month ago. 

--With assistance from Greg Ritchie.

(Updates with chart.)

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