12:46 PM EDT, 07/07/2025 (MT Newswires) -- Bunds made losses on Monday as German manufacturing production surprised to the upside in May, offsetting a notable drag from construction, said Daiwa Capital Markets.

While markets await news of a potential 'agreement in principle' between the European Union and the United States ahead of Wednesday's deadline, German and French trade figures for May will be Tuesday's data focus, noted the bank.

After front-loading of shipments in Q1, German exports to the U.S. fell 10.5% month over month in April, precipitating a decline in overall exports (-1.7% month over month) to their lowest level in three months. But despite the imposition of higher tariffs in early April, U.S. imports data for May suggest a slight pickup in German exports (1% month over month) led by autos and pharmaceuticals, pointed out Daiwa.

With surveys also pointing to resilient overseas demand, the bank sees German exports to rebound "somewhat." By contrast, French exports to the U.S. likely continued to normalize. The U.S. imports data suggests another drop of about 20% month over month, principally due to weaker shipments of aerospace goods, cosmetics and pharmaceuticals, to roughly one-third below March's peak, it added.

Gilts followed the global trend lower on a "quiet" Monday for United Kingdom economic news, according to Daiwa.

With no top-tier data scheduled for the U.K., Tuesday should be another quiet day for U.K. economic news, stated the bank.

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