Euro zone bond yields rise as market digests PMIs

Euro zone government bond yields rose on Wednesday as markets digested stronger than expected Purchasing Managers' Index (PMI) data from the bloc that could reduce some pressure on the European Central Bank to cut rates beyond June. Germany's 10-year bond yield, the benchmark for the euro zone, was up 2.3 basis points (bps) to 2.53%. Germany's two-year bond yield, which is more sensitive to ECB rate expectations, was 1.8 bps higher at 3.00%.

Euro zone government bond yields rose on Wednesday as markets digested stronger than expected Purchasing Managers' Index (PMI) data from the bloc that could reduce some pressure on the European Central Bank to cut rates beyond June.

Germany's 10-year bond yield, the benchmark for the euro zone, was up 2.3 basis points (bps) to 2.53%. Italy's 10-year yield was 3.8 bps​ higher at 3.86%, and the gap between Italian and German bunds widened 1.8 bps to 131.9.

The spread between U.S. 10-year Treasuries and German bunds narrowed 0.4 bps to 209. Germany's two-year bond yield, which is more sensitive to ECB rate expectations, was 1.8 bps higher at 3.00%.