FX.co ★ Italian 10-Year Yield Dips Amid Rate Cut Bets and Geopolitical Uncertainty

Italy's 10-year government bond yield has dipped towards 3.48%, its lowest point since mid-June, as investors digest recent economic data and increasingly anticipate interest rate cuts from both the European Central Bank and the Federal Reserve. Global trade discussions are under scrutiny as the market awaits U.S. President Trump's July 9 deadline, coupled with ongoing Middle East tensions. Data highlights show Italy's inflation rate inching up to 1.7% in June from 1.6% in May, with core inflation advancing to 2.1% from 1.9%. The ECB's terminal rate is projected to settle between 1.75% and 1.80%, according to Vice President Luis de Guindos, who reiterated on Monday the suitability of the current policy stance while underscoring the necessity for adaptability amid economic uncertainties. Concurrently, the Federal Reserve is anticipated to implement a minimum of two 25-basis-point interest rate reductions this year, responding to a deceleration in labor market strength and increased inflation risks exacerbated by U.S. tariffs.