Eurozone Bonds Steady as U.S. Treasurys Lag on Political Turmoil
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Eurozone government bonds opened the post-Easter week on a stable footing, with yields holding broadly unchanged and continuing to outperform their U.S. counterparts. The benchmark 10-year Bund yield remained flat at 2.461% on Tuesday, reflecting a cautious but steady tone among European fixed income investors ahead of key macro data later this week.
In contrast, U.S. Treasurys extended their recent underperformance, with the 10-year yield climbing 1.5 basis points to 4.419%. The move followed a renewed political storm out of Washington, where President Donald Trump intensified criticism of Federal Reserve Chair Jerome Powell and hinted at a possible dismissal before the end of Powell’s mandate in May 2026. The sharp escalation in political risk has steepened the U.S. Treasury curve and sparked concerns about the central bank’s independence, which remains a core pillar of global investor confidence in dollar-denominated assets.
Looking ahead, eurozone bond markets are expected to remain sensitive to economic data, with flash April PMI figures due on Wednesday. These figures will serve as a key gauge of economic momentum across the bloc and could influence expectations around the European Central Bank’s policy trajectory. For now, eurozone yields remain anchored by relative stability in governance and monetary policy credibility, offering a safer alternative in a market environment increasingly dominated by geopolitical and institutional uncertainty across the Atlantic.
In contrast, U.S. Treasurys extended their recent underperformance, with the 10-year yield climbing 1.5 basis points to 4.419%. The move followed a renewed political storm out of Washington, where President Donald Trump intensified criticism of Federal Reserve Chair Jerome Powell and hinted at a possible dismissal before the end of Powell’s mandate in May 2026. The sharp escalation in political risk has steepened the U.S. Treasury curve and sparked concerns about the central bank’s independence, which remains a core pillar of global investor confidence in dollar-denominated assets.
Looking ahead, eurozone bond markets are expected to remain sensitive to economic data, with flash April PMI figures due on Wednesday. These figures will serve as a key gauge of economic momentum across the bloc and could influence expectations around the European Central Bank’s policy trajectory. For now, eurozone yields remain anchored by relative stability in governance and monetary policy credibility, offering a safer alternative in a market environment increasingly dominated by geopolitical and institutional uncertainty across the Atlantic.