Germany’s 10-year Bund yield rose to 2.89%, approaching its highest level since mid-March 2025, as investors digested the recently finalized EU–India landmark trade agreement amid escalating global trade tensions. The deal aims to boost markets amid US tariffs and Chinese export controls, covering a quarter of global GDP and creating a free trade zone spanning two billion people after nearly two decades of negotiations. Markets were also rattled by US President Donald Trump’s threat of higher tariffs on South Korean goods, following similar warnings to Canada and Europe earlier this month. Investors now await key economic releases, including Germany’s flash January inflation and Q4 GDP, as well as the US Federal Reserve’s policy announcement on Wednesday, where rates are expected to remain unchanged. Adding to uncertainty, speculation is rising that a more dovish successor to Fed Chair Jerome Powell could be announced this week.
