FX.co ★ Germany 10-Year Bond Yield Above 2.5%

As investors evaluated the Middle East conflict and its implications for monetary policy, Germany's 10-year Bund yield surpassed 2.5%. Though President Trump's declaration of a ceasefire between Israel and Iran momentarily alleviated concerns about potential energy supply issues, the truce is still considered precarious, as Israel has already accused Iran of breaching the agreement. Economically, Germany's Ifo business climate index rose to its highest point in nearly a year, indicating enhanced sentiment. Nonetheless, preliminary PMI data presented a varied outlook, showing signs of stabilization within the Euro Area's private sector activity. In terms of monetary policy, the market remains confident in the prospect of a 25-basis-point rate cut by the European Central Bank (ECB) by the end of the year. President Christine Lagarde commented that "at the current interest-rate levels, we believe that we are in a good position to navigate the uncertain circumstances," while ECB member Villeroy de Galhau noted that there remains a possibility for further rate cuts in the upcoming six months.