Since mid-July, the yield on Germany's 10-year bund, which serves as the Eurozone's benchmark, has stabilized around 2.6%. Investors continue to assess a combination of economic, political, and monetary factors. This week, attention is directed toward a critical meeting scheduled for Friday between US President Donald Trump and Russian President Vladimir Putin, aiming to address the Ukraine conflict. However, reports suggest Ukrainian President Volodymyr Zelenskyy will not be in attendance.
In the United States, expectations for imminent Federal Reserve interest rate cuts have heightened, driven by lackluster payroll figures and a weaker ISM Services PMI reading. Across the Atlantic, the European Central Bank concluded its recent easing phase in July, marking its eighth rate reduction in a year, thereby bringing borrowing costs to their lowest levels since November 2022. Despite this, some investors continue to predict an additional cut before the year concludes.
On the macroeconomic landscape, Eurozone GDP showed a modest 0.1% growth in the second quarter, while inflation remained steady at 2% for July. Risk factors persist, as the European Union faces forthcoming 15% tariffs on most of its goods exported to the United States.
