Euro Zone Bond Yields Tumble Amid Trump’s Tariff Turmoil

Euro zone bond yields decreased as markets anticipated rate cuts by the European Central Bank. U.S. President Trump's tariff announcement spurred fears of a trade war, potentially harming global growth. Money markets now see an 80% likelihood of a 25 basis point ECB rate cut in April.

Euro zone government bond yields saw a sharp decline on Thursday in response to a wave of concern over global economic growth following U.S. President Donald Trump's tariff announcement. Markets are now increasingly expecting the European Central Bank to implement rate cuts.

President Trump revealed plans for broad 10% tariffs on imports from major U.S. trading partners, which amplified fears of a looming trade war. The announcement led to a notable drop in the benchmark German 10-year yield, plunging nearly 8 basis points to hit its lowest point since early March.

Germany's 2-year yield, known for its sensitivity to ECB policy decisions, fell by 8.5 basis points, marking its lowest level since December 12. Market speculation now indicates an 80% chance that the ECB will cut rates by 25 basis points in April.

(With inputs from agencies.)