Eurozone Bond Yields Climb as Market Reassesses Fed Impact

Euro zone government bond yields rose on Monday, reversing a decline from last week driven by the U.S. Federal Reserve. Traders reassessed the Fed's impact on Europe as data from Germany's Ifo institute showed an unexpected improvement in German business morale, reaching its highest level in 15 months.

This buoyed the belief that the European Central Bank might be nearing the end of its monetary easing cycle. Germany's 10-year bond yield, a benchmark for the euro zone, climbed approximately 5 basis points to 2.77%, nearing last week's five-month peak of around 2.79%.

The continuous upward trajectory in long-end European government bond yields since June reflects investors' unease about rising government debt levels. The ECB is likely to maintain current rates next month, with potential talks on further cuts if economic conditions worsen.

(With inputs from agencies.)