Euro Zone Bond Yields Rise Amid Strong U.S. Job Data

Euro zone government bond yields climbed on Friday following robust U.S. job data for May, implying the Federal Reserve might delay interest rate cuts. Germany's 10-year yield increased by 7 basis points, while Italy's rose by 10. Despite the ECB's recent rate cut, inflation target challenges remain.

Euro zone government bond yields rose on Friday after data showed the U.S. economy added more jobs than expected in May, indicating the Federal Reserve should be in no rush to cut interest rates. Germany's 10-year yield was up 7 basis points at 2.62%, rising further after the U.S. data. Italy's 10-year yield was 10 basis points higher.

The move came a day after the European Central Bank cut its main interest rates for the first time since 2019, though rate-setters warned on Friday that the final stage of pushing inflation down to 2% could be tough. Money markets were last pricing in little more than one further 25 basis point rate cut this year by the ECB.

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