China hopes the United States can meet halfway to “prepare for high-level interactions” between the two countries, Foreign Minister Wang Yi told U.S. Secretary of State Marco Rubio in a phone call on Monday.
The US Federal Reserve wraps up its two-day policy meeting on Wednesday, and interest rate decisions from the European Central Bank and the Bank of Japan are expected on Thursday.
Borrowing costs in the euro area rose last Friday after strong Purchasing Managers’ Index data, as traders priced in a slightly less than 50% chance of another ECB rate cut next year.
Investors are now awaiting key inflation data for the euro area later this week, which could influence expectations for future ECB policy moves.
German ten-year Bund yields were unchanged at 2.62%, after falling by one basis point (bp) the day before. Money markets had priced in a 52% chance of a 25 basis point interest rate cut by the ECB by September. The policy rate is estimated at 1.90% in December 2026, compared to the current 2%. The German two-year yield, which is more sensitive to expectations regarding the ECB’s policy rate outlook, remained roughly unchanged at 1.98%.
The yield gap between safe-haven Bunds and 10-year French government bonds – a market measure of the risk premium investors demand to hold French government bonds – was 80 basis points.
The spread stood at 87.96 basis points in early October, the widest since January, driven by investor concerns about France’s fiscal path.
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