Euro Zone Bond Yields Rise Amid Precious Metals Selloff

Safe-haven bond yields in the Euro zone rose amid a market rout in precious metals fueled by increased margin requirements and Fed chair nomination speculations. The ECB's upcoming meeting will be closely watched for insights into the impact of the euro's strength on future monetary policy.

The euro zone's safe-haven government bond yields climbed on Monday as investors faced a market selloff in precious metals. Silver and gold saw extended declines, initially dropping further before trimming some losses. The selloff was intensified by CME Group's decision to raise margin requirements on gold and silver contracts.

This upheaval follows U.S. President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair. Despite the tumult in metals, the euro zone bonds remained resilient, with German 10-year yields up by 2 basis points at 2.86%, and two-year yields rising 3 bps to 2.09%.

Amid these developments, investors also turn their attention to the European Central Bank's upcoming meeting. The ECB is expected to maintain interest rates, but the euro's recent strength has sparked concerns about its implications on policy-making. Market apprehensions about deflationary pressures could potentially prompt future interest rate cuts.