ECB Rate Decision Keeps Markets on Edge as Euro Zone Bond Yields Rise

Euro zone bond yields experienced a slight increase on Thursday after two days of decline, as markets awaited a European Central Bank rate decision. The focus was on Germany's 10-year yield, which rose, suggesting expectations of a rate cut by the ECB. Attention was also on Italy's yield movements.

Bond yields across the euro zone edged higher on Thursday, breaking a two-day decline as investors awaited a pivotal interest rate decision by the European Central Bank (ECB). Germany's 10-year yield, a key euro zone benchmark, rose by 2.7 basis points to 2.203%, after a substantial decline earlier in the week.

Market analysts anticipate that the ECB will lower interest rates by 25 basis points, setting the new rate at 3.25%. Such a move is expected to be confirmed during the ECB's announcement at 1215 GMT. Traders remain keenly interested in any signals concerning future rate cuts, which are currently anticipated to happen at consecutive meetings.

Meanwhile, Italy's 10-year bond yield increased by 1.9 basis points to 3.424%, and the yield spread between Italy and Germany was stable at 121 basis points, marking its lowest since March.

(With inputs from agencies.)