Euro zone bonds steady but fiscal jitters persist for long-end

Long-dated euro zone bonds yields were steady on Wednesday but lingered near multi-year highs as investors continued to fret over the sustainability of government debt levels at the start of a month of seasonally heavy debt supply.

Germany's 30-year yield was little changed at 3.413%, close to its highest level in 14 years touched on Tuesday.

Other regional long-dated bond yields, including in France and Italy, tracked their German counterpart's subdued moves and were last a touch lower at 4.49% and 4.66%, respectively.


Germany's 10-year yield, the benchmark for euro zone bonds, was flat at 2.78%.

French government bonds showed a muted reaction to Finance Minister Eric Lombard's remarks that the government would have to compromise on plans to cut the budget deficit if Prime Minister Francois Bayrou is toppled in a confidence vote on September 8.

Long-tenor euro zone bond yields had climbed on Tuesday, extending their rise from August as investors braced for heavy bond supply in September and October from Germany, Japan, the U.S. and others.

Societe Generale expects more than 100 billion euros ($117 billion) in European bond issuance in September and October.

The 30-year U.S. Treasury yield rose about 6 bps in the previous session and was last hovering just shy of 5%.

The jitters spilled over to Asia on Wednesday, pushing Japan's 30-year Japanese government bond (JGB) yield to a record of 3.292%.