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2025-07-30 15:23:01
Eurozone government bond yields held steady on Wednesday, heading for their first weekly decline in a month, as investors assessed the EU-US trade deal and the euro's sharp depreciation this week. With the Federal Reserve set to announce its monetary policy decision after the European markets close, investors are currently reluctant to make large bets on eurozone government bonds. With uncertainty surrounding tariffs largely resolved following the EU-US agreement to impose 15% tariffs on imports, bond yields have continued to fall this week. Germany's 10-year government bond yield, a benchmark for the eurozone, was last at 2.695%, little changed on the day and down 3 basis points so far this week. This would be the first weekly decline since late June. Analysts at Commerzbank said second-quarter eurozone economic growth data, due later on Wednesday, will reflect some of the impact of US tariff concerns and could provide new guidance for German government bonds. Wednesday's data showed that Spanish and French growth exceeded expectations in the second quarter. The euro has come under significant pressure against the dollar this week. Despite initial relief over the US-China trade deal, the market has shifted to concerns about the deal's impact on the eurozone's long-term economy. The euro has fallen 1.5% so far this week, its biggest weekly drop since November. The two-year German bond yield remained steady at 1.92%, set to fall two basis points this week. Money markets currently indicate that the probability of another ECB rate cut this year has fallen to around 30%, with markets predicting another cut in borrowing costs could come as early as the March meeting.
