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Long U.S. Treasury Yields Ease; Fed Rate Cut Isn't Imminent

0617 GMT – Long-dated U.S. Treasury yields are little changed in European hours, while there was no cash trading in Tokyo on Japanese holiday. Following last week's CPI print for June, money markets continue to rule out an interest-rate cut by the Federal Reserve in July, according to LSEG. 'I think we could see a rate cut in September, and possibly another reduction in December,' FP Markets' Aaron Hill says in a note. However, 'this all ultimately depends on how the data performs and the impact that tariffs have had,' he says. The two-year Treasury yield is flat at 3.877%, while the 10-year yield is down 1.5 bps at 4.414%, according to Tradeweb. ( 0606 GMT – German Bunds are likely to stabilize further this week, with buyers entering at levels about 2.70% for the 10-year Bund, say Commerzbank Research's Hauke Siemssen and Erik Liem in a note. 'In Bunds, 10-year yields got repeatedly bought above 2.70%, with the steepening mostly driven by the weak ultra-long end,' the rates strategists say. Shaky risk sentiment and subdued purchasing manager indexes are likely to provide support, they say. This would also cap a rise in yields. Flash estimate purchasing managers' data for July for France, Germany and the eurozone are due on Thursday, prior to the European Central Bank's interest-rate decision later that day. The 10-year German Bund yield closed at 2.699% last Friday, according to Tradeweb. (