FX.co ★ Germany 10-Year Bond Yield Near March-Highs

The yield on the German 10-year Bund remained around 2.7%, approaching the highs seen in March earlier this year, as investors weighed the implications of monetary policy alongside renewed trade tensions. Market forecasts still anticipate that the Federal Reserve will implement at least two additional 25 basis point rate cuts this year. However, recent data have underscored the robustness of the US economy and its labor market. In Europe, there is a prevailing sentiment that the European Central Bank’s easing cycle may be drawing to a close, following the decision to keep rates unchanged for the second consecutive meeting in September. Economic indicators present a varied outlook, with signs of recovery in the services sector, while the manufacturing downturn worsens. On the trade front, US President Trump has announced a 100% tariff on branded or patented pharmaceutical products. Nonetheless, the European Commission reported securing a 15% cap on US tariffs for pharmaceuticals. Meanwhile, reports indicate that the European Commission is preparing to levy tariffs ranging from 25% to 50% on steel imports from China.