Euro Zone Bond Yields Steady Amid Monetary Uncertainties

Euro zone bond yields, including Germany's 10-year benchmark, remained stable, maintaining their highest since November. With Germany's yield up slightly and Italy's yield rising to 3.55%, investors face an unsure monetary policy landscape. The spread between U.S. and German bond yields has also narrowed.

Bond yields across the euro zone showed minimal movement on Monday, maintaining levels last seen in mid-November. This comes as investors navigate the challenging waters of an unpredictable monetary policy and borrowing outlook for 2025.

Germany's 10-year bond yield, serving as the euro zone's benchmark, recorded a slight rise of 0.5 basis points, reaching 2.4%. At the same time, Italy's 10-year yield increased by 1.2 basis points to 3.55%, while the spread between Italian and German bond yields remained steady at 114 basis points.

The difference between U.S. 10-year Treasury and German bond yields witnessed a reduction of 1.8 basis points, bringing it down to 221 basis points. Meanwhile, Germany's two-year yield, closely linked to European Central Bank rate expectations, remained largely unchanged at 2.1%.

(With inputs from agencies.)