Euro Bonds Shine Amid U.S. Policy Uncertainty

Euro zone government bonds gained favor as traders sought safety following U.S. President Donald Trump's criticism of the Fed. The German 10-year bond yield eased to 2.457%, while U.S. Treasury yields rose due to tariff concerns. Europe's reputation improved, bolstering its position as a secure investment.

Eurozone government bond yields edged lower on Tuesday, finding favor over U.S. Treasuries as traders moved to safer European bonds amid concerns over the Federal Reserve's independence following President Donald Trump's critical remarks. Trump's comments on domestic growth, urging immediate interest rate cuts, triggered a sell-off in long-dated Treasuries.

German 10-year bond yields, the eurozone benchmark, slipped by 0.9 basis points to 2.457%, whereas U.S. 10-year Treasury yields rose to 4.418%. This comes as investors, wary of Trump's tariff strategies, have been moving their funds away from the U.S., benefiting European assets.

According to Societe Generale's Kenneth Broux, "Europe and the ECB are emerging stronger from the trade conflict, enhancing their image as a safe haven." European bonds continue to attract investor interest amid ongoing U.S. policy uncertainty, with markets also reacting to the ECB's recent rate cut.

(With inputs from agencies.)