German Bond Yields Dip Ahead of Anticipated Rate Cut

German government bond yields fell for the sixth consecutive day as the U.S. Federal Reserve signaled a potential rate cut by September. Yields on 10-year Bunds dropped to 2.28%, while the spread between U.S. Treasuries and German Bunds widened. The Bank of England's monetary policy decision is awaited.

German government bond yields fell for the sixth consecutive day on Thursday, marking their longest stretch of gains since November. This decline follows the U.S. Federal Reserve's signaling of a potential rate cut as early as September, which in turn boosted Treasuries.

The benchmark 10-year Bund yields, a key indicator for the euro zone bloc, dropped by 1.8 basis points to 2.28%, continuing a six-day downward trend, after ending July with an 18 basis point decline.

The spread between U.S. 10-year Treasuries and German Bunds widened by 2.6 basis points to 177 bps, reversing much of Wednesday's 3.27-bp narrowing. Italian 10-year yields were largely stable at 3.65%. Meanwhile, the Bank of England is expected to announce its monetary policy decision later in the day, with a 61% chance of a rate cut. Additionally, France and Spain are set to enter the bond market later with long-term auctions.

(With inputs from agencies.)