Eurozone Bonds Steady as Investors Eye Fed Decisions

Eurozone government bond yields remained stable as investors awaited key policy meetings by the U.S. Federal Reserve, Bank of England, and Bank of Japan. Germany's 10-year bond yields stayed flat amid expectations of a rate cut from the Fed. German investor morale increased unexpectedly in September.

Eurozone government bond yields experienced minimal changes on Tuesday, reflecting investors' cautious stance ahead of significant policy meetings by major central banks, including the U.S. Federal Reserve and the Bank of England.

The Federal Reserve's decision on interest rates, anticipated on Wednesday, holds particular significance. While markets are predicting a 25-basis-point cut, investor reactions will largely depend on accompanying statements and the updated 'dot plot' projections from the central bank, as well as comments from Chair Jerome Powell regarding future monetary easing.

Additionally, Germany's 2-year yields showed slight declines, and Italy's 10-year yields witnessed a small rise. Meanwhile, Fitch downgraded France's credit rating, influencing investor sentiments toward French debt amid ongoing political uncertainties.

(With inputs from agencies.)