FX.co ★ Bund Yields Fall as Markets Eye ECB, PMIs, and Tariff Talks

The yield on Germany's 10-year government bond has declined below 2.65%, marking its lowest point since July 9. This shift comes as investors focus on the forthcoming policy decision from the European Central Bank (ECB) and the release of preliminary Purchasing Managers' Indices (PMIs) from Europe's major economies, both scheduled for Thursday. In parallel, market participants remain vigilant regarding the ongoing tariff negotiations between the EU and the US. The ECB is anticipated to maintain current interest rates following eight consecutive cuts, opting for a cautious approach amidst continued tariff uncertainties, a stable euro, and sluggish inflation rates. Meanwhile, preliminary composite PMIs for France, Germany, and the broader eurozone are expected to show a slight increase in July, providing new insights into the region's economic dynamics. Additionally, EU representatives are set to convene as early as this week to discuss potential contingency plans in case of a no-deal situation with US President Donald Trump, whose stance on tariffs has become more stringent as the August 1 deadline approaches.