German and UK government bonds rose, boosted by safe-haven buying ahead of the Federal Reserve's decision statement

German and UK government bonds have outperformed US Treasuries, with safe-haven buying emerging after the EU formulated a plan for reciprocal tariffs against the US. The money market remains steady in its bets on a rate cut by the European Central Bank in June, expecting a reduction of 23 basis points, but bets on further easing have risen by as much as 2 basis points, with swap trades indicating an expectation of an additional 64 basis points cut this year. The Federal Reserve is expected to maintain interest rates in the range of 4.25% to 4.5% later on Wednesday. Traders and economists unanimously expect the Bank of England to cut rates by 25 basis points to 4.25% on Thursday, with swap trades indicating an expected cut of 38 basis points in June and a total cut of 96 basis points by the end of the year