Euro Zone Bond Yields Rise Amid Geopolitical Tensions and Wage Growth Concerns

Euro zone bond yields increased on Wednesday due to geopolitical tensions from Ukraine and wage growth concerns. German bond yields rose, as ECB data showed wage growth that could slow rate cuts. Friday's economic data is crucial for ECB strategy amid structural growth challenges, said ECB's vice-president.

On Wednesday, euro zone bond yields saw an uptick, reversing previous declines as investors weighed geopolitical tensions and economic indicators. Recent strikes by Ukraine on Russian territory and President Putin's nuclear doctrine have injected uncertainty into the market.

The German 10-year bond yield climbed 4 basis points to reach 2.37% while the two-year yield rose by 2 basis points, indicating a shift in investor sentiment. Additionally, data from the European Central Bank showed accelerated wage growth in the third quarter, largely due to one-time payments in Germany.

ECB policymakers are monitoring these developments closely, especially as Friday's purchasing manager index survey looms. These figures are pivotal for future ECB policy, as structural issues continue to impede euro zone growth, a sentiment echoed by ECB Vice-President Luis de Guindos.

(With inputs from agencies.)