Italy’s 10-year government bond yield fell back below 3.6%, as investors weighed the implications of the newly announced US-EU trade agreement.
The deal sets a 15% base tariff on most EU exports to the US—including automobiles, semiconductors, and pharmaceuticals—while maintaining 50% tariffs on steel and aluminum, though only above certain quotas.
Aerospace components, selected chemicals, and raw materials will be exempt.
Additionally, the EU committed to purchasing $750 billion worth of US energy and military equipment.
On the monetary policy front, expectations for further rate cuts by the European Central Bank have eased after the ECB held interest rates steady last week for the first time in a year.
President Christine Lagarde stated the eurozone is “in a good place” as inflation approaches target, though she cautioned that uncertainty surrounding the broader economic impact of the new tariffs could still dampen the outlook.