FRANKFURT (dpa-AFX) - The prices of German federal bonds fell slightly on Monday. The benchmark Euro-Bund futures contract fell 0.16 percent to 128.72 points. The yield of ten-year federal bonds was at 2.83 percent. Data on economic growth and inflation in Germany weighed on prices.

The significant drop in inflation has raised hopes that the German economy will pick up again. According to preliminary data, the annual inflation rate fell from 4.5 percent in the previous month to 3.8 percent in October. This is the lowest rate since August 2021, and the drop was also steeper than economists had expected. "Falling inflation rates also brighten the economic outlook," VP Bank Chief Economist Thomas Gitzel said.

Bonds were also weighed down by growth figures from Germany. The local economy had not gained momentum in the summer either. Gross domestic product (GDP) fell slightly by 0.1 percent in the third quarter compared to the previous quarter. Analysts, however, had expected a somewhat stronger decline of 0.2 percent.

Commerzbank's chief economist Jorg Krämer, however, is skeptical about further developments: "In the winter half-year, the German economy will probably shrink somewhat again because it is suffering from the massive interest rate hikes by the ECB and almost all Western central banks." Unlike most economists, Commerzbank expects gross domestic product to decline again next year./jsl/he