20.10.202510:09:12UTC+00Bund Yields Rise Amid Easing US-China Trade Tensions

On Monday, the yield on Germany’s 10-year Bund rose slightly to 2.59%, pulling away from the four-month low of 2.523% recorded on Friday. This shift occurred as apprehensions regarding US-China trade tensions and the security of US regional banks moderated. US Treasury Secretary Scott Bessent is set to meet with Chinese Vice Premier He Lifeng in Malaysia this week to discuss averting a potential increase in US tariffs on Chinese imports—a situation that President Donald Trump recently labeled as unsustainable ahead of his upcoming meeting with Chinese President Xi Jinping later this month. Concurrently, money markets have adjusted their expectations, increasing the likelihood of interest rate cuts by both the European Central Bank (ECB) and the Federal Reserve. Current projections indicate an 80% probability of a 25-basis-point rate reduction by the ECB by July 2026, while the Fed is anticipated to implement at least two 25-basis-point cuts in its concluding meetings of the year.