Bund yields rise to multi-week highs on trade hopes
Safe-haven German Bund prices fell on Friday, driving yields higher, as expectations that a trade deal between the United States and the UK could pave the way for similar tariff agreements boosted appetite for riskier assets.
Markets expect trade tensions to hurt economic growth in the euro area, potentially forcing the European Central Bank to cut interest rates further.
US President Donald Trump and British Prime Minister Keir Starmer announced on Thursday a limited bilateral agreement that leaves Trump's 10% tariffs on British exports in place and lowers prohibitive US duties on British car exports.
Trump said he expected substantive negotiations with China this weekend and predicted that US tariffs on Beijing of 145% would come down.
Germany's 10-year yield, the euro area benchmark, rose 4.5 basis points (bps) to 2.565%, its highest since April 14.
German bond yields at three week highs as investors await debt sales
Money markets priced in an ECB deposit facility rate of 1.67%.
They had indicated a depo rate below 1.55% in mid-April as the ECB suggested it was ready to cut rates in response to the potential adverse economic impact of US tariffs.
German 2-year yields, more sensitive to European Central Bank policy rates, were up 3 bps at 1.80%.
Italy's 10-year yield rose 4 bps to 3.62%, leaving the spread over Germany's Bund yield - a market gauge of the risk premium investors demand to hold Italian debt - at 101 bps.
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Express Tribune
3 hours ago
- Express Tribune
US, China agree on trade 'framework'
Top officials from the United States and China said Tuesday that they had agreed on a "framework" to move forward on trade, following two days of high-level talks in London to resolve tensions. US Commerce Secretary Howard Lutnick expressed optimism after a full day of negotiations that concerns surrounding rare earth minerals and magnets "will be resolved" eventually, as the deal is implemented. But this framework will first need to be approved by leaders in Washington and Beijing, officials said, at the end of meetings at the British capital's historic Lancaster House. All eyes were on the outcomes of negotiations as both sides tried to overcome an impasse over export restrictions. US officials earlier accused Beijing of slow-walking approvals for shipments of rare earths. The world's two biggest economies were also seeking a longer-lasting truce in their escalating tariffs war, with levies currently only temporarily on hold. "We're moving as quickly as we can," US Trade Representative Jamieson Greer told reporters. "We would very much like to find an agreement that makes sense for both countries," he added, noting that the relationship was complex. "We feel positive about engaging with the Chinese," he maintained. Speaking separately to reporters, China International Trade Representative Li Chenggang said: "Our communication has been very professional, rational, in-depth and candid." Li expressed hope that progress made in London would help to boost trust on both sides. US Treasury Secretary Scott Bessent earlier described the closely-watched trade talks as productive, although scheduling conflicts prompted his departure from London with negotiations still ongoing. Bessent, who led the US delegation with Lutnick and Greer, left early to return to Washington for testimony before Congress, a US official told AFP. Chinese Vice Premier He Lifeng headed his country's team in London, which included Li and Commerce Minister Wang Wentao. Both sides do not yet have another gathering scheduled. But Lutnick said Tuesday that US measures imposed when rare earths "were not coming" would likely be relaxed once Beijing moved forward with more license approvals. Global stock markets were on edge, but Wall Street's major indexes climbed on hopes for progress earlier Tuesday. The London negotiations follow talks in Geneva last month, which saw a temporary agreement to lower tariffs. This time, China's exports of rare earth minerals — used in a range of things including smartphones, electric vehicle batteries and green technology — were a key issue on the agenda.
Business Recorder
4 hours ago
- Business Recorder
Oil prices climb on US-China trade deal
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Business Recorder
4 hours ago
- Business Recorder
US, China reach deal to ease export curbs
WASHINGTON/LONDON: A deal getting the fragile truce in the US-China trade war back on track is done, US President Donald Trump said on Wednesday, after negotiators from Washington and Beijing agreed on a framework covering tariff rates. The deal also removes Chinese export restrictions on rare earth minerals and allows Chinese students access to American universities. Trump took to his social media platform to offer some of the first details to emerge from two days of marathon talks held in London that had, in the words of US Commerce Secretary Howard Lutnick, put 'meat on the bones' of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs that had reached crushing triple-digit levels. 'Our deal with China is done, subject to final approval with President Xi and me,' Trump said on the Truth Social platform. 'Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!). We are getting a total of 55% tariffs, China is getting 10%.' A White House official said the 55% represents the sum of a baseline 10% 'reciprocal' tariff Trump has imposed on goods imported from nearly all US trading partners; 20% on all Chinese imports because of punitive measures Trump has imposed on China, Mexico and Canada associated with his accusation that the three facilitate the flow of the opioid fentanyl into the US; and finally pre-existing 25% levies on imports from China that were put in place during Trump's first term in the White House. Lutnick said the 55% rate for Chinese imports is now fixed and unalterable. Asked on Wednesday on CNBC if the tariff levels on China would not change, he said: 'You can definitely say that.' Still, many specifics of the deal and details for how it would be implemented remain unclear. China's commerce ministry did not immediately reply to a request for comment and more information.
