Germany’s 10-year Bund yield fell to 2.87%, down from a two-week high of 2.89%, as US-Europe tensions showed signs of easing. US President Donald Trump said he would hold off on imposing tariffs on goods from European countries opposing his plan to take control of Greenland and announced that a “framework for a future deal” had been agreed following talks with NATO Secretary-General Mark Rutte, though no details were provided. The announcement eased some market concerns, but geopolitical uncertainty remains elevated. Denmark has ruled out negotiations on ceding control of Greenland, with Prime Minister Mette Frederiksen stating that while security and investment issues can be discussed, sovereignty is non-negotiable. On the economic front, signs of a resilient Eurozone economy and inflation near target continue to support expectations that the European Central Bank is likely to keep interest rates on hold for the foreseeable future.
