Bank of France: The outcome of trade negotiations is a key driver of interest rates in the euro area market.

The interest rate strategist of Socit Gnrale in France stated in a report that in the short term, the outcome of trade negotiations remains the main uncertainty for the eurozone interest rate market. They said that at least one more rate cut is expected to be reasonable from the perspective of economic growth and inflation risks. In the long term, long-term premiums are consolidating. In this context, strategists expect that the yield on 10-year German government bonds will continue to range from 2.40% to 2.80% by the end of the year. They also anticipate that the yield curve will steepen further, meaning that the spread between short-term and long-term bonds will widen.