European bond yields steady as metals rout grips markets

Safe-haven euro zone government bond yields were steady on Monday as a rout in precious metals ‌gripped markets at the start of a week that will also see an interest rate decision from the European ⁠Central Bank.

Safe-haven euro zone government bond yields were steady on Monday as a rout in precious metals ‌gripped markets at the start of a week that will also see an interest rate decision from the European ⁠Central Bank. Silver and gold extended last week's declines, sliding around 10% and 6%, respectively, prompting investors to sell other assets like stocks to cover losses.

CME Group raised margin requirements on ​various futures contracts, including on gold and silver, which contributed to the sharp selloff ‍in metals that began at the tail-end of last week after U.S. President Donald Trump nominated Kevin Warsh to be the next Federal Reserve Chair. However government bonds, which are generally regarded as safe-haven ⁠assets, ‌appeared largely unscathed. German ⁠10-year yields, the euro zone's benchmark, were last steady at 2.8428%, while two-year yields, which are more ‍sensitive to rate expectations, were stable at 2.068%.

Investors also looked to the ECB's meeting ​later this week. While the central bank is widely expected to keep interest ⁠rates unchanged, markets will be watching closely for signs as to how the euro's recent strength could affect ⁠policy-making going forward. Concerns that a stronger euro could amplify deflationary pressures and prompt the ECB to cut interest rates further emerged last week, pushing German two-year yields ⁠to their biggest monthly drop since April 2025. Before the central bank meeting, inflation data ⁠for various euro zone ‌economies, and the bloc itself, is expected. Data out of Germany on Friday showed inflation in Europe's largest economy picked up ⁠slightly in January.

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