Germany’s 10-year Bund yield fell to 3.47%, retreating from last week’s 17-year highs as Brent crude prices eased toward $100 a barrel amid tentative signs of an improvement in the geopolitical outlook. Recent comments from US President Trump pointing to progress in talks with China and leaving the door open to diplomacy with Iran have helped reduce fears of an imminent supply shock, while stronger regional crude flows have also eased pressure on physical markets. Meanwhile, a disastrous state election result for Germany’s governing CDU has raised fresh questions about Chancellor Friedrich Merz’s political standing. The party suffered its worst-ever state election result, failing to win a single seat and prompting calls from some members for Merz to step down after just 16 months in office. France’s public finances are also under growing scrutiny, with Scope Ratings downgrading the country and Morningstar DBRS shifting its outlook to negative ahead of next year’s presidential election.