German 10-year Bund yields held steady at 2.74%, near their highest level since September 3. European bonds mirrored the muted tone in US Treasuries after Fed Chair Powell reiterated a cautious stance on future rate decisions, as the central bank weighs persistent inflation pressures from tariffs against signs of a weakening labor market. Money markets now price in more than a 90% chance of a Fed rate cut in October, with investors awaiting Friday’s US PCE price index for further direction. In Europe, sentiment was mixed. The HCOB PMI survey signaled Germany’s fastest private-sector growth since May 2024, supported by resilient services, while manufacturing contracted more sharply than expected. Meanwhile, geopolitical risks intensified after US President Trump voiced confidence that Ukraine could retake all its territory occupied by Russia.