Euro Zone Bonds Steady Amid Geopolitical Easing

Euro zone bond markets steadied as longer-dated yields dropped slightly due to easing geopolitical tensions and improved stability in the Japanese bond market. Germany's 10-year yield fell after consecutive increases, while the bond market calmed alongside easing tensions over U.S. tariffs and the geopolitical climate.

In a display of resilience, euro zone bonds steadied Thursday, with longer-dated yields declining slightly. This development follows a dampening of geopolitical tensions and stabilization in the Japanese bond market turmoil that previously spurred a global bonds selloff.

Germany's 10-year bond yield, the benchmark within the euro zone, exhibited its first drop after five sessions of rises, now down just over one basis point at 2.86%. Super-long 30-year German debt yields also decreased by around two basis points to 3.49%. These adjustments reflect a 'bull flattening' trend reversing the previous 'bear steepening' driven by concerns over U.S. tariffs and their potential European economic impacts.

Additionally, a less volatile Japanese bond market contributed to the calmer atmosphere in European markets. Other euro zone bonds, notably French and Italian, slightly outperformed Germany's, despite British bond yields rising on speculation about Andy Burnham's return to parliament.

(With inputs from agencies.)