Italy: 10-Year Bond Yield Hovers Around 3.5%

Italy’s 10-year bond yield has held in a narrow 3.5%–3.6% range since mid-May, mirroring modest moves across European debt markets as investors digest economic, political, and monetary signals. Attention is on Friday’s meeting between US President Donald Trump and Russian President Vladimir Putin, aimed at resolving the conflict in Ukraine, though Ukrainian President Volodymyr Zelenskyy is reportedly not expected to attend. In the US, expectations for imminent Federal Reserve rate cuts have strengthened after weaker payrolls figures and a softer ISM Services PMI. In Europe, the ECB concluded its latest easing cycle in July, having delivered eight rate cuts over the past year that pushed borrowing costs to their lowest since November 2022. Even so, some market participants foresee another cut before year-end. Data-wise, euro area GDP expanded 0.1% in Q2 and inflation held steady at 2% in July. Risks remain elevated as the EU faces 15% tariffs on most goods exported to the US.