Euro Zone Bond Yields Rise Amid Political Uncertainty

Euro zone government bond yields experienced an upward trend on Monday, bouncing back from Friday's decline, following U.S. data that heightened expectations of Federal Reserve rate cuts.

The market's attention is now on the upcoming confidence vote in the French parliament, although analysts predict only a limited market impact from the potential collapse of the government. Germany's 10-year bond yield, considered the benchmark for the euro zone bloc, increased by 1 basis point to reach 2.67%, having hit a recent high of 2.80% last week.

The benchmark 10-year U.S. Treasury yield remained relatively stable at 4.09% during early trading in London, after experiencing a drop on Friday. The yield gap between German Bunds and 10-year French government bonds, a measure of the risk premium on French debt, was at 78 basis points, down from last week's 82 basis points.

(With inputs from agencies.)