Euro Zone Bond Yields Surge Ahead of ECB Decision

Euro zone bond yields increased on Monday after four prior sessions of decline. Investors are focusing on upcoming U.S. inflation data and the European Central Bank's interest rate decision. Germany's 10-year bond yield rose to 2.21%, while Italy's 10-year yield reached 3.59%, widening the gap between the two.

Euro zone bond yields surged on Monday, ending a four-session losing streak as investors turned their attention to key U.S. inflation data set for release on Wednesday and the European Central Bank's interest rate announcement on Thursday.

Germany's 10-year bond yield, the benchmark for the euro zone, rose by 4.1 basis points (bps) to hit 2.21%. Bond yields move inversely to prices, reflecting higher interest rates expectations.

Italy's 10-year yield climbed by 3.7 bps to 3.59%, expanding the yield gap with Germany to 137 bps. Germany's two-year bond yield, which is more sensitive to European Central Bank rate forecasts, increased by 3 bps to 2.26%.

(With inputs from agencies.)