Eurozone Bonds Rally Amid U.S. Economic Slowdown

Two-year eurozone bond yields fell as U.S. labor market data for October showed slower growth. Nonfarm payrolls rose modestly, impacted by external factors, which influenced U.S. short-dated bond yields and Fed rate expectations. European bonds mirrored U.S. trends, reflecting strong economic data and political events.

Eurozone bond yields experienced a decline on Friday following the release of U.S. labor market data, which highlighted a significant slowdown in October. This added to existing expectations of a cooling U.S. economy.

The U.S. nonfarm payrolls rose by just 12,000 in October, a stark contrast to the previous month's 223,000 increase, missing economist predictions. Despite initial declines, short-dated bond yields rebounded due to a rise in prices paid by manufacturers, influencing investor expectations on Fed rate adjustments.

Germany's 2-year bond yield initially dropped before minor recovery, emphasizing the global ripple effect of U.S. economic performance and Federal Reserve policy. Meanwhile, European bond yields have been rising, influenced by U.S. trends and strong inflation data in the eurozone.

(With inputs from agencies.)