Germany’s 10-year bond yield slipped below 2.73%, tracking US Treasuries after Fed Chair Powell signaled possible rate cuts in his Jackson Hole remarks, though he warned tariffs still pose inflation risks.
The ECB ended its rate-cut cycle in July after eight cuts but markets assign a 45% chance of another this year, with September likely on hold.
Eurozone momentum is improving, with the composite PMI rising to 51.1 in August, its strongest in 15 months, and manufacturing expanding for the first time since June 2022.
Germany’s factory sector is nearing the end of a prolonged slump, suggesting resilience despite trade and geopolitical headwinds.
Meanwhile, in the UK, hotter July inflation at 3.8% has curbed expectations of further BOE easing, with traders now betting on a pause.