Euro Zone Bonds Hold Steady Amid U.S. Jobs Data Worries

Euro zone government bonds remained stable as investors grew concerned about upcoming U.S. jobs data. This uncertainty has fueled global market volatility and a shift towards safe-haven assets. The European Central Bank is expected to announce a rate cut soon, with Germany and Italy also seeing shifts in their bond yields.

Euro zone government bonds held firm on Wednesday, as investor anxieties heightened in anticipation of U.S. jobs data due later this week. The looming report has exacerbated market volatility globally, spurring capital flows into traditional safe-haven assets.

The global market has been plagued by risk aversion, driven in part by concerns regarding Friday's U.S. employment report, which could significantly influence the Federal Reserve's impending interest-rate decision.

Meanwhile, the European Central Bank, set to convene next week, is anticipated to implement a quarter-point rate cut. ECB Board member Piero Cipolollone indicated that the central bank has the maneuvering room to reduce rates further while warning of becoming overly restrictive.

Notably, benchmark 10-year Bund yields were mostly steady early Wednesday at 2.279%, with two-year yields seeing a slight drop of 2 basis points to 2.361%. Germany has lined up an auction of 15-year Federal bonds, and Italian 10-year yields slipped by nearly 1 basis point to 3.663%, narrowing their spread over Bunds. French 10-year OATs remained around 3.0%.

(With inputs from agencies.)