The German 10-year Bund yield tumbled 8 basis points to 3.38%, its lowest level in five weeks, tracking its US counterparts lower. The decline came amid a global flight to safety following an equity sell-off driven by AI-related concerns and fears over elevated borrowing costs, persistent inflationary pressures, high interest rates, and elevated oil prices. Meanwhile, ECB President Lagarde said energy-driven inflation had yet to spread across the broader euro-area economy, reinforcing the case for a cautious, wait-and-see approach. However, ECB policymaker Gediminas Šimkus warned that further rate hikes could be necessary as price pressures continue to build, adding that an increase as early as this month remained possible. Persistent upside inflation surprises and the ongoing US-Iran conflict have also strengthened market expectations of another ECB rate hike in December.