German Bond Yields Droop Amid US Trade Policy Concerns

German government bond yields in the Euro zone saw their greatest weekly decline since April amid concerns over U.S. trade policy's long-term economic effects. While German inflation showed easing, attention was on U.S. data impacting euro rates. Investors are preparing for ECB's likely interest rate cuts.

German government bond yields within the Euro zone experienced a significant decline this week as investors reacted to ongoing uncertainties surrounding U.S. trade policy. By Friday, the yields were poised for their biggest weekly drop since mid-April, influenced by potential extended economic sluggishness.

As of 1457 GMT on Friday, the 10-year German bond yield increased by 1 basis point to 2.52% after hitting a recent three-week low. The market reflected renewed volatility following a U.S. appeals court's decision to reinstate tariffs enacted by President Donald Trump, adding to the market's unpredictability.

U.S. economic metrics, such as consumer spending and inflation trends, played a crucial role in shaping euro rates, as American market dynamics seemed to outweigh domestic European data for determining investor sentiment. The ECB is widely anticipated to lower interest rates, a move seen by many as necessary amidst mounting global trade tensions.

(With inputs from agencies.)