Steady Bond Yields Amid Inflation Watch

Euro zone government bond yields remained stable as investors awaited German and French inflation data. Germany's 10-year yield decreased slightly, while U.S. Treasury yields increased after a significant fall. Money markets anticipate ECB policy adjustments by December, affecting yield expectations.

Euro zone government bond yields largely held their ground on Wednesday, as investors looked forward to upcoming inflation data from Germany and France. Germany, whose 10-year yield often serves as a benchmark for the euro area, saw a modest dip by 0.5 basis points, settling at 2.49%.

Meanwhile, U.S. Treasury yields experienced an uptick during early trading in London, following a six-day decline that brought them to a three-week low. This movement was influenced by data indicating a sharp drop in U.S. job openings for March, alongside plummeting consumer confidence levels not seen in nearly five years. Speculation grew in money markets regarding future European Central Bank policies, which are predicted to position the ECB deposit facility rate at 1.62% by year-end, with expectations of a 25 basis point reduction in June.

Germany's 2-year yield remained flat at 1.74%, reflecting susceptibility to future ECB rate decisions. Italy's 10-year yield held steady at 3.62%, maintaining the spread between Italian and German 10-year bonds at 109 basis points, underscoring differing fiscal outlooks within the eurozone.

(With inputs from agencies.)