FX.co ★ Italy 10-Year Bond Yield at Over 3-Week Low

Italy's 10-year government bond yield has decreased further to approximately 3.52%, marking a fresh low since mid-August. This movement follows market anticipation of a potential rate cut by the Federal Reserve and ongoing political developments in France. Notably, opposition leaders have vowed to vote against Bayrou following his recent confidence motion announcement, leading markets to largely factor in the anticipated fall of the government. As a result, only a modest market reaction is expected. Attention now shifts to the upcoming European Central Bank (ECB) meeting on Thursday. Policymakers are widely expected to keep interest rates unchanged for the second consecutive time. Despite a slight increase in Eurozone inflation to 2.1% in August, exceeding the ECB's target slightly, European economies continue to demonstrate resilience in the face of a 15% tariff on US exports.