Bund Yields Fall as Markets Eye ECB, PMIs, and Tariff Talks

Germany’s 10-year Bund yield dipped below 2.65%, its lowest level since July 9, as investor attention turned to the European Central Bank’s upcoming policy decision and the release of flash PMIs from Europe’s largest economies, both due Thursday. Market participants also remain alert to ongoing EU-US tariff negotiations. The ECB is widely expected to keep rates unchanged after eight consecutive cuts, as policymakers adopt a wait-and-see approach amid lingering tariff uncertainty, a resilient euro, and subdued inflation. Meanwhile, flash composite PMIs for France, Germany, and the eurozone are projected to inch higher in July, offering fresh insight into the region’s economic momentum. Separately, EU envoys are preparing to meet as early as this week to discuss potential contingency measures in the event of a no-deal scenario with US President Donald Trump, whose tougher tariff stance has sharpened ahead of the August 1 deadline.