Euro Zone Bonds Steady Amid Economic Jitters and Geopolitical Concerns

Euro zone government bond yields remained mostly unchanged, poised to close the week on a higher note amid U.S. economic data and Fed Chair Jerome Powell's comments. Market focus included the potential for a Ukraine peace deal and Germany's upcoming elections, impacting bond supply and interest rate dynamics.

Euro zone government bond yields showed little movement on Friday, set to conclude the week with gains following U.S. economic reports and Federal Reserve Chair Jerome Powell's indication that there would be no immediate cut in interest rates.

U.S. retail sales declined in January, leading to a drop in U.S. Treasury yields, while Germany's benchmark 10-year bond yield remained steady. Investors are eyeing the stagnant euro zone economy, a potential Ukraine peace deal, and Germany's elections, impacting future bond supply.

U.S. Vice President JD Vance warned Russia of possible sanctions if no peace deal is reached. He urged Europe to enhance defense spending. Market attention is also on Germany's February 23 elections, which could see changes to its borrowing limit policy, affecting bond issuance and market dynamics.

(With inputs from agencies.)