FX.co ★ German Bond Yields Rebound

Germany's 10-year Bund yield inched closer to 2.6% as investors reacted positively to President Trump's choice to delay a proposed 50% tariff on EU imports. Late last week, Trump stated that discussions with the EU were "stalling" and intended to impose the hefty tariff starting June 1. However, after speaking with EC President von der Leyen, Trump announced an extension for trade discussions until July 9. According to the reciprocal tariff framework introduced in April, the EU was initially subject to a 20% tariff, which has now been temporarily reduced to 10% until the new deadline. On the monetary policy front, the ECB is anticipated to lower interest rates in its June meeting, likely followed by a period of evaluation to determine the economic impact of potential US tariffs. Recent German economic data has been mixed: while first-quarter growth figures were revised upwards and the Ifo Business Climate Index exceeded expectations, a weaker-than-anticipated PMI survey indicated a return to contraction in private sector activities in May.