Eurozone bond yields edge lower as oil prices ease, investors await US inflation data

Eurozone government bond yields edged lower in early trading on Monday, supported by a modest decline in oil prices and renewed concerns over technology stocks, while investors remained cautious ahead of key US inflation data.

Germany's 10-year government bond yield, the benchmark for the euro zone, fell 1 basis point to 3.24%, while the two-year yield declined 2 basis points to 2.95%, Reuters reported.

The benchmark 10-year Bund yield has fallen for four consecutive weeks as volatility in equity markets prompted investors to seek the relative safety of government bonds. Concerns over France's public finances last month also encouraged investors to shift towards German debt.


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However, the recent decline follows a sharp increase in borrowing costs earlier this year. Germany's 10-year yield climbed to 3.65% in late September, its highest level since 2009, amid a global bond selloff driven by concerns that elevated energy prices could fuel inflation and rising borrowing requirements among governments and companies.

On Monday, a roughly 2% decline in Brent crude prices provided some support to government bonds. Renewed concerns surrounding technology stocks, particularly Nvidia, also contributed to demand for safer assets.

However, rising European natural gas prices limited the decline in bond yields, keeping overall market movements subdued.

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Elsewhere in the euro zone, government bond yields largely tracked the German benchmark. France's 10-year yield declined 1 basis point to 4.76%, while Italy's equivalent yield fell 2 basis points to 4.32%.

Investors are now turning their attention to US inflation data due on Tuesday, which could offer fresh indications about the Federal Reserve's interest rate outlook and provide direction to global bond markets.



(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)