FX.co ★ German 10-Year Bund Yield Steady Ahead of ECB Decision

The yield on Germany's 10-year Bund remained stable above 2.5%, hovering near the one-month low experienced earlier this week. Investors are closely monitoring the upcoming European Central Bank (ECB) policy announcement scheduled for Thursday, while also evaluating the implications of Germany's latest tax relief package. The market anticipates a 25 basis point rate cut following lower-than-expected inflation figures from the Eurozone, where consumer prices rose by 1.9% year-on-year in May—just under the forecasted 2.0% and below the ECB's target for the first time since September 2024. Despite recent indications from some ECB officials suggesting a potential pause, there's growing speculation about further economic easing in the coming months. Additionally, Germany's cabinet has approved a substantial €46 billion tax relief initiative for 2025–2029. The package includes strategies like a 'super depreciation' allowing 30% per year over three years to reduce corporate tax liabilities and stimulate investment. On the trade front, EU Trade Commissioner Maroš Šefcovic reported that discussions with US Trade Representative Jamieson Greer have been "positive," indicating significant progress.