Trump's Policies May Prompt ECB to Accelerate Interest Rate Cuts

Forex - Rabobank Research indicates that the U.S.'s potential shift towards more protectionist policies may complicate growth in Europe and could encourage the European Central Bank to increase the pace and magnitude of interest rate cuts. Money markets are pricing in approximately 130 basis points of rate cuts from the ECB by the end of 2025, with this figure increasing by around 10 basis points during the day. Rabobank analysts stated, "This is leading to a strong rally at the front end." The yield on two-year German bonds fell by about 9 basis points to 2.217%. In contrast, the yield on two-year U.S. Treasury bonds rose by 4 basis points to 4.243%.