Eurozone Bonds Experience Significant Yield Shift

Eurozone short-dated government bond yields marked their largest weekly decline in months. Weak economic data and recession fears prompted traders to anticipate rate cuts by the ECB. German and Italian bond yields fell amid a broader eurozone economic slowdown, contrasting with rising U.S. Treasury yields.

Eurozone short-dated government bond yields experienced their most significant weekly drop in months, driven by a wave of weak economic data that has led traders to anticipate future rate cuts from the European Central Bank (ECB).

Germany's two-year bond yield, highly sensitive to rate changes, was down 81 basis points on Friday and was poised to end the week 16 basis points lower, marking its biggest fall since September. This comes amidst an ECB policy decision that offered little change to current interest rate expectations.

Across the eurozone, economic concerns mounted. German data highlighted rising unemployment and reduced retail sales, aligning with broader economic challenges. This unrest hinted at potential recession fears in Germany, while Italy's economy stagnated, and France reported lower consumer price increases than expected.

(With inputs from agencies.)