Italy’s 10-year BTP yield held just below 3.5% as investors weighed the impact of the recently finalized EU-India landmark trade agreement and renewed US tariff threats. The deal, covering a quarter of global GDP, creates a free trade zone spanning two billion people after nearly two decades of negotiations and aims to open markets amid US tariffs and Chinese export controls. Markets were also unsettled by US President Trump’s threat of higher tariffs on South Korean goods, following similar warnings to Canada and Europe earlier this month. Investors now look ahead to the US Federal Reserve’s policy decision on Wednesday, where rates are expected to remain unchanged. Speculation is also growing that a more dovish successor to Fed Chair Jerome Powell could be named this week.
