Euro Zone Bond Yields: A Week of Decline Amid Economic Concerns

Euro zone's long-dated government bond yields are set for a fourth weekly drop, signaling economic uncertainty. French debt's risk premium stabilizes amid political pressures. As markets anticipate inflation data, Germany's benchmark yields remain flat with ECB rate cut expectations affecting short-term bonds.

Euro zone government bond yields fell for the fourth consecutive week, highlighting the region's economic woes. Inflation expectations dropped below 2%, adding to the outlook's grimness.

The French government's readiness to compromise on the budget has stabilized the risk premium on its debt, amid fears that opposition to the bill could risk Prime Minister Michel Barnier's tenure. Financial markets eagerly await inflation data from key European nations and the broader euro zone.

Germany's 10-year bond yield, a standard reference in the bloc, held steady at 2.3% while having declined 12.5 basis points over the week. With the European Central Bank's meeting looming, markets have lowered the chances of a significant 50 basis point rate cut, reflecting shifts in economic indicators like PMI data.

(With inputs from agencies.)