For the first time since December, the monetary markets fully incorporate a accumulated decrease of 75 basic points in 2025. The yield curve was steep and the yield of the two -year bonus fell six basic points, to 3.89%.
The markets adjusted their expectations on the monetary policy of the Federal Reserve and now They discount three rates cuts this year, In a context of growing uncertainty for the impact of the new US tariffs on Canada, Mexico and China on global growth.
For the first time since December, monetary markets fully incorporate a accumulated drop of 75 basic points in 2025, According to Bloomberg. The yield curve was steep and the two -year bonus yield fell six basic points, up to 3.89%.
The effect was replicated in Europe, where the expectations of flexibility of the European Central Bank gained ground in fear that the Eurozone will be next to face commercial barriers. In parallel, the increase in defense expenditure within the EU fueled the concern for fiscal deficits, promoting the yields of the long -term bonds.
“Tariffs do not represent an inflationary problem, but a challenge for growth,” Mohit Kumar, chief economist of Jefferies for Europe. According to the analyst, the impact will be reflected in more pronounced yield curves, particularly in the United Kingdom and Germany.
The new rates imposed by the United States include a 25% tariff on most Canadian and Mexican imports, while Gravamen on China rose to 20%, affecting approximately 1.5 billion dollars in annual trade. In response, Canada and China announced commercial reprisals, while the Mexican president, Claudia Sheinbaum, indicated that her government will wait for Washington’s next decision before taking measures.
“The market must now reassess the impact of these tariffs, which are already a reality,” Kathleen Brooks, XTB research director said. In this context, investors will remain attentive to the publication of the US Employment Report on Friday, key to calibrate the impact of commercial tensions on the economy.
Recent data on manufacturing activity show signs of deceleration, which reinforces concerns about US growth and increases pressure on Fed to adjust its monetary policy.
Source: Ambito
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