While the easing of trade tensions has helped reduce recession concerns, it has also led markets to temper expectations of aggressive Federal Reserve rate cuts, as inflation risks appear to have moderated. This may allow policymakers greater flexibility in their approach. Market participants now turn their attention to upcoming retail sales and producer price data for further insights into economic conditions and potential policy shifts.

In bond markets, U.S. 10-year Treasury yields have stabilized around 4.47% following a four-day rally. Japan’s 10-year bond yields are holding near 1.46%, while German 10-year yields continue to rise, reaching 2.69%, supported by inflation figures that aligned with expectations.