FX.co ★ German Bund Yield Tumbles on Trade War Worries

Germany's 10-year Bund yield descended to just below 2.5%, marking its lowest point since March 4th, due to escalating trade tensions that have stoked fears of a global economic slowdown. On Friday, China declared it would implement a 34% tariff on all U.S. goods starting April 10, in retaliation to President Trump's latest tariff measures. In Europe, French President Emmanuel Macron has called on companies to cease U.S. investments, while the European Commission is readying its own countermeasures. President Trump's recent actions include a 10% tariff on all imports, with elevated rates for certain nations. This includes a 20% tariff on EU goods and an additional 34% duty on Chinese products. In reaction to these developments, the market has priced in over a 90% probability of a 25 basis point cut by the ECB in April. Projections now suggest the deposit rate may decrease to 1.8% by December, revising previous forecasts of 1.9% and deviating from the current rate of 2.5%.