0528 GMT - The downward pressure on bond yields will continue unless there is some sort of reversal from U.S. President Trump, says Daniel Loughney at Mediolanum International Funds in a note. A prolonged tariff war would weaken growth, increase unemployment and ultimately lead to slowing inflation or even deflation, the head of fixed income says. "It's no surprise, therefore, that the bond market has reacted by pricing in more rate cuts while longer maturity yields and breakeven inflation rates have fallen," he says. The eurozone must prepare for potentially difficult times ahead, with Germany and Italy, both of which rely on auto exports, expected to be hit the hardest, he says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

April 02, 2025 01:28 ET (05:28 GMT)

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