Euro Zone Bond Yields Steady Amid Global Policy Shifts

Euro zone government bond yields remained stable on Tuesday, as investor attention shifted towards forthcoming policy meetings by the Federal Reserve and the Bank of Japan. This follows the recent EU-U.S. trade agreement announcement, which included a significant 15% import tariff on European goods by the United States.

Germany's 10-year government bond yield, a crucial benchmark in the euro area, showed minimal change, settling at 2.688%. Meanwhile, the European Central Bank (ECB) maintained its deposit rate at last week's session, pausing after slashing rates by 200 basis points over the past year.

Market speculation about future rate cuts is rife, with traders seeing a 65% likelihood of an ECB rate cut by December. Deutsche Bank analysts have revised their outlook, anticipating the ECB will likely hike rates at the end of 2026, as the EU economy shows resilience following the trade deal.

(With inputs from agencies.)