German 10-year Bund yields reversed earlier gains and slipped back toward 2.96%, approaching their lowest level since April 8. The move came as easing oil prices helped temper inflation concerns and as renewed optimism over Middle East diplomacy improved risk sentiment.
Axios reported that US and Iranian negotiators have reached a tentative 60-day memorandum of understanding to extend the ceasefire and open talks on Iran’s nuclear program, though the agreement still requires final approval from President Trump. While this development offered some support to broader markets, overall geopolitical tensions remain high.
At the same time, investors digested the latest minutes from the European Central Bank, which showed that several policymakers viewed the April decision to leave interest rates unchanged as a narrow one. Some indicated they would have backed a rate increase had it been formally proposed. Money markets are now almost fully pricing in a 25-basis-point hike at the June 11 meeting, with at least one additional increase anticipated by year-end.
