Euro Zone Bonds Steady Amid Diverging Rate Outlooks

Euro zone bond yields are poised for a second straight weekly decline, remaining within a tight trading range. Investors are weighing differing interest rate expectations between the European Central Bank and the U.S. Federal Reserve.

Commerzbank analysts predict a slight upward drift in yields, as trading activity and economic data announcements taper off. German 10-year yields ticked 1 basis point higher to 2.643%, while still registering a 3.4-basis point decline this week.

In the U.S., President Donald Trump has nominated Stephen Miran to the Fed's board, reflecting his interest in lowering rates. U.S. 2-year Treasury yields have fallen significantly, contrasting with modest changes in European yields. The Bank of England also cut rates, revealing a split among policymakers on future inflation and growth.

(With inputs from agencies.)