Eurozone Yields Climb as Investors Eye U.S. Data and Inflation Risks

Eurozone yields rose for the third consecutive day, driven by investor caution over inflation risks due to geopolitical tensions in the Middle East. German short-dated yields, sensitive to ECB monetary expectations, rebounded to around 2%. Markets await U.S. data to assess future rate outlooks amidst eased inflationary pressures.

Eurozone yields rose for the third day in a row after reaching multi-month lows earlier this week. Investors are now focusing on upcoming U.S. economic data, which may influence market expectations.

German short-term yields, sensitive to European Central Bank policy expectations, recovered to around 2% after hitting near two-year lows. This shift reflects concerns over inflation risks linked to geopolitical tensions in the Middle East.

Eurozone business activity contracted less than anticipated last month, while markets remain watchful of U.S. data that could alter rate outlooks. Investors are particularly attentive to employment figures to gauge the Federal Reserve's direction, as inflationary pressures have eased.

(With inputs from agencies.)