Financial Markets Daily Report
26 June 2025
Investors traded cautiously in a session without any major macroeconomic data releases. Attention shifted to the NATO meeting —where members agreed to increase defense spending to 5% of GDP—, ongoing trade uncertainty, the so-far upheld ceasefire between Israel and Iran, and evolving monetary policy expectations.
In this context, euro area sovereign bond yields edged higher on expectations of higher defense spending. US 2-year Treasury yields fell on the back of increased expectations of more than two interest rate cuts from the Fed this year. The euro rose against the dollar to 1.167, the highest level since 2022.
Stock markets were mixed. The main indices in the euro area pared small losses, while US stocks edged higher, boosted by gains in large-cap tech stocks. In commodities, Brent crude prices held around $67 per barrel as the risk of further escalation of the conflict in the Middle East remains contained for now.