Euro Zone Bond Stability Amid Trade Talks

Euro zone government bond yields remained stable on Tuesday, with markets closely monitoring the second day of trade negotiations between the United States and China.

This week, traders are eagerly awaiting comments from European Central Bank officials after the bank reduced interest rates by 25 basis points to 2% last week, signaling a potential end to its easing cycle. Germany's 10-year yield, a key euro zone benchmark, dropped three basis points to 2.542%.

Additionally, two-year German yields fell by three basis points to 1.846%, while 30-year yields were at 3.008%. Italian 10-year yields slipped by two basis points to 3.482%, keeping the German-Italian yield gap at 91.90. Meanwhile, Japan's super-long government bond prices increased as the government considered buying back bonds to counter rising yields. With U.S. inflation data due this week, the market remains on high alert for tariffs' impact, as analysts predict some short-term potential for euro zone yields.

(With inputs from agencies.)