FX.co ★ Bund Yields Drop Amid Mideast Tensions, Trade War Fears

The yield on the German 10-year Bund is trending downward, nearing 2.5%, marking its lowest point since May 7. This shift comes as investors gravitate towards safe-haven assets due to rising tensions in the Middle East and renewed trade war anxieties. President Donald Trump recently announced the relocation of American personnel, citing the region as "potentially a dangerous place," while also disclosing plans to communicate with key trading partners in the next few weeks about impending unilateral tariff rates. Concurrently, in the United States, softer inflation figures and indications of a cooling labor market have heightened expectations that the Federal Reserve might initiate interest rate cuts as soon as September. In Europe, statements from European Central Bank officials have fueled speculation that the ECB could soon pause its easing cycle, opting for a wait-and-see approach to evaluate the economic repercussions of possible US tariffs.