Euro Zone Bonds Steady Amid U.S. Jobs Surge and UK Gilt Market Turbulence

Euro zone government bond yields closed lower on Thursday, influenced by external market developments. The U.S. jobs report surpassed forecasts, while volatility hit the British gilt market following a sharp selloff.

Germany's 10-year bond yield, a euro zone benchmark, fell 4 basis points to 2.578%. Societe Generale's Kenneth Broux noted that this decline reversed a UK-induced selloff resulting from concerns over Britain's fiscal health and Finance Minister Rachel Reeves's future.

Despite U.S. Treasury yields rising, euro bonds maintained gains as traders adjusted expectations for Fed rate cuts. The premium of 10-year Treasury yields over German Bunds saw its largest one-day increase in a month, with market focus shifting to upcoming U.S. inflation data.

(With inputs from agencies.)