2025.08.1811:01:32UTC+00German 10-Year Bund Yield Eases Slightly

Germany's 10-year bund yield experienced a modest decline to 2.75% from last week's 4.5-month peak of 2.78%, as traders adjusted their expectations concerning the Federal Reserve's potential rate cut. Attention has shifted towards Washington, where important meetings are taking place between Zelenskiy, EU leaders, and President Trump following Trump's discussions with Putin. Although concrete proposals are not yet clear, the markets are keenly observing for any geopolitical impacts. Additionally, the Federal Reserve's Jackson Hole Symposium draws significant attention, with Chair Powell anticipated to provide insights into the future policy direction. Current market sentiment indicates an 85% probability of a 25 basis point rate cut by the Fed in September, a reduction from earlier predictions of a 50 basis point cut, following inflation data that highlighted persistent pressures. Regarding the European Central Bank (ECB), expectations have remained stable since the decision to hold rates in July. Projections suggest only an 11 basis point easing by the end of the year, indicating less than a 50% likelihood of another cut. Investors are also keeping a close eye on the Euro Area's flash Purchasing Managers' Indexes (PMIs) for indications of economic momentum after the second quarter Gross Domestic Product (GDP) exhibited minimal growth of just 0.1%, while inflation maintained a steady rate of 2%.