Euro Zone Bond Yields Rise Amid Modest Economic Growth
Euro zone government bond yields increased as Purchasing Managers Index data indicated a modest return to economic growth, influencing a slight shift in investor's expectations on the European Central Bank's easing cycle. While France's services sector struggled, Germany's private sector saw a slight recovery.

Euro zone government bond yields increased on Friday following data from the Purchasing Managers Index that indicated a modest economic growth return in the bloc. This prompted investors to slightly adjust bets regarding the European Central Bank's easing cycle.
Despite France's services sector continuing to shrink due to weak demand and political uncertainty, Germany's private sector emerged from a six-month contraction. Nevertheless, German authorities have cut their growth projection for 2025 to 0.3% from 1.1% as reported by Handelsblatt.
The Euro zone PMI edged just above the 50 mark, signaling slight growth. Germany's benchmark 10-year bond yield rose by 4 basis points, poised to conclude the week with a 4.5 bps hike. Meanwhile, money markets adjusted the ECB deposit facility rate to slightly above 2.1% for 2025 after prior expectations of 2.05%.
(With inputs from agencies.)
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