Euro Zone Bond Yields Waver Ahead of ECB Policy Announcement

Euro zone bond yields remained uncertain as investors anticipate the European Central Bank's policy decision. Germany's 10-year yield showed little change. Market expectations for significant easing have waned, with the ECB favoring gradual rate cuts. U.S. inflation data due Wednesday could influence Federal Reserve's rate decisions.

Euro zone bond yields experienced oscillations as investors anticipate the European Central Bank's upcoming policy announcement and crucial U.S. inflation data. Germany's 10-year yield, a key euro zone benchmark, held steady at 2.122%, near a recent low.

Despite weakening growth projections, the ECB appears hesitant to implement significant rate cuts. According to SEB strategist Jussi Hiljanen, influential ECB figures aim to moderate market expectations. Analysts expect a modest 25 basis point rate cut this Thursday.

Ahead of Wednesday's U.S. inflation report, market observers remain attentive, as its outcomes could sway the Federal Reserve's interest rate decisions next week.

(With inputs from agencies.)