Euro Zone Bond Yields Fall Ahead of Key U.S. Employment Report

Euro zone government bond yields dropped for the fourth straight day as investors awaited the U.S. non-farm payrolls report. The data suggests a slowing U.S. economy. Germany's 10-year bond yield fell to 2.18%, its lowest since August 22, while Italy's 10-year yield dropped to 3.55%.

Euro zone government bond yields fell for a fourth consecutive day on Friday as investors anticipated the latest monthly U.S. employment report. Recent data has indicated a slowdown in the U.S. economy, with job openings rising and manufacturing remaining weak. The pivotal U.S. non-farm payrolls report, expected at 8.30 a.m. ET (1230 GMT) on Friday, is forecasted to show a slight increase in employment for August.

Germany's 10-year bond yield, which is the euro zone bloc's benchmark, dropped 2.7 basis points (bps) to 2.18%, marking its lowest point since August 22. Bond yields move inversely to prices. Meanwhile, Italy's 10-year yield decreased by 2.4 bps to 3.55%, with the spread between Italian and German bond yields holding steady at 136 bps.

In addition, Germany's two-year bond yield, known for its sensitivity to European Central Bank rate expectations, dipped 1.9 bps to 2.276%, its lowest since August 5.

(With inputs from agencies.)