Eurozone Bond Market Shifts Amid Economic Uncertainty

Eurozone bond markets are experiencing a fourth weekly gain in Bund yields, with Germany's fiscal measures and ECB's policy playing critical roles. Uncertainties persist due to limited U.S. economic data and structural challenges in Germany's economy. U.S. bond yields are rising amid inflationary apprehensions.

Eurozone benchmark Bund yields are marking a fourth consecutive weekly increase, reaching levels reminiscent of early October when the U.S. government shutdown began. This uptick comes amid a stable monetary policy by the European Central Bank and ongoing scrutiny over Germany's fiscal strategy.

Germany's 10-year yields inched up to 2.70%, reflecting a 3.5-basis-point weekly advance. Despite a lack of major fiscal reforms, several measures were approved, such as an energy price cap and a support fund for SMEs, indicating the government's intent to rejuvenate the economy.

U.S. Treasury yields are also climbing, amidst speculative anticipation of delayed economic data releases. The bond market remains cautious about inflation trajectories and potential policy shifts by the Federal Reserve, while investors closely watch the evolving fiscal landscapes in both Germany and the U.S.

(With inputs from agencies.)