Euro Zone Bond Yields Slide on Anticipated ECB Rate Cut

Euro zone bond yields hit a one-week low in anticipation of a European Central Bank rate cut. Markets expect a third quarter-point reduction. Cooling inflation data and growth concerns shape ECB outlook amid geopolitical tensions. Germany's bonds show strong demand, while Italy plans budget adjustments.

Euro zone bond yields touched their lowest levels in over a week on Wednesday as markets await a much-anticipated interest rate cut from the European Central Bank.

Germany's 10-year bond yield dropped by 5 basis points to 2.18%, marking its lowest point since October 4. This downturn in yields comes as falling oil prices ease inflation worries. Investors are closely watching the upcoming ECB meeting, where a rate cut decision is anticipated on Thursday.

The expectation of further ECB rate cuts, combined with receding hopes of aggressive action from the Federal Reserve, have influenced euro zone yields. Meanwhile, Germany's two-year bond yield also saw a decrease, falling 5 basis points to 2.168%. Trading activities in the primary market showed robust demand for Germany's 30-year bonds.

(With inputs from agencies.)