Bond Markets React to Stabilization Measures in Japan and Easing EU-U.S. Trade Tensions
Bond Markets traders interpreted Japan’s outreach to participants as a deliberate attempt to restore stability following record-breaking yield surges. The Finance Ministry’s initiative included private meetings to gauge demand for sovereign debt, triggering a global rally in long-term bonds. The yield on Japan’s 30-year bond dropped by about 19 basis points.
Europe Joins Optimism After Weaker-Than-Expected Inflation Data
Simultaneously, European bonds also gained ground, buoyed by softer-than-expected inflation figures in France. Additionally, the European Union announced plans to accelerate trade negotiations with the United States, signaling a more conciliatory phase in bilateral relations.
U.S. Faces Pressure from Deficit and Tax Reform Concerns
Meanwhile, U.S. Treasury bonds remain under pressure. Signature tax reforms from former President Donald Trump and a recent credit downgrade by Moody’s have intensified scrutiny over the growing fiscal deficit. The diminished appeal of U.S. assets is compounded by a weakening dollar and continued uncertainty surrounding global trade disputes.
Experts Urge Aligning Debt Issuance with Market Demand
“Perhaps highly indebted countries like the U.K. or the U.S. should also consider gauging investor appetite for their sovereign debt,” said Kathleen Brooks, director of research at XTB. “Factoring market sentiment into budget planning could help avoid endless political cycles over spending cuts.”
Trump Retracts 50% EU Tariff Threat After Call with von der Leyen
Former President Donald Trump has postponed a dramatic 50% tariff EU goods following a phone call with European Commission President Ursula von der Leyen.
Global Portfolio Reallocations Underway
Benoit Broux warned that markets remain wary of repeated cycles of escalation and retreat without clear direction. “There are still active discussions about reallocating global portfolios away from U.S. assets — a process that will take weeks or months,” he emphasized.
Tech Stocks Shine in Early Trading
In early market activity, Informatica Inc. jumped 6.3% following a Bloomberg report indicating acquisition talks with Salesforce Inc. Similarly, Trump Media & Technology Group surged 9.6% after revealing plans to raise $2 billion in equity financing and $1 billion in convertible bonds to invest in cryptocurrencies.
