France’s 10-year government bond yield slipped back below 3.4% as markets responded to the recently announced US-EU trade agreement.
The deal introduces a 15% base tariff on most EU exports to the US—including automobiles, semiconductors, and pharmaceuticals—while retaining 50% tariffs on steel and aluminum, though only above specific quotas.
Meanwhile, aerospace components, certain chemicals, and raw materials will be exempt.
As part of the agreement, the EU also pledged to purchase $750 billion worth of US energy and additional military equipment.
On the monetary policy side, expectations for further European Central Bank rate cuts have diminished following its decision to hold interest rates steady for the first time in a year.
ECB President Christine Lagarde noted the eurozone is now “in a good place,” with inflation returning to target.
However, lingering uncertainty over the broader economic effects of the new tariffs may continue to cloud the outlook.