European Bond Yields React Amid Policy Week Anticipation

Euro zone government bond yields fell slightly on Monday as investors remained cautious ahead of policy meetings at major central banks, including the Federal Reserve and the Bank of England. A public holiday in Britain resulted in thinner trading volumes, affecting overall market activity.

Germany's 10-year benchmark yield declined by 0.5 basis points to 2.51%, following a modest rise last week. This contrasts with the more significant fluctuations observed in early March related to Germany's spending announcements. Currently, concerns about potential U.S. tariffs are negatively impacting Bund yields, according to Rainer Guntermann, a rate strategist at Commerzbank.

In the United States, Treasury yields experienced a slight reduction, with the 10-year yield falling to 4.31%. Investor attention has shifted toward the Federal Reserve's upcoming decisions amid economic developments, such as stronger-than-expected job data. Meanwhile, oil prices dipped over 2% after OPEC+ opted to accelerate oil output hikes.

(With inputs from agencies.)