Euro Zone Bonds Hold Steady Amid Fed Rate Speculations

Euro zone bond yields held steady on Monday, following increases last week. This stability comes as investors reevaluate expectations concerning a significant rate cut from the Federal Reserve, pivoting their focus to key geopolitical meetings.

Volodymyr Zelenskiy, Ukraine's leader, and European leaders are meeting with Donald Trump in Washington, discussing potential steps post Trump's talks with Russian President Vladimir Putin. An agreement to cease hostilities in Ukraine might boost investor risk appetite, impacting safe-haven assets like German government bonds.

Investors also have eyes on the Federal Reserve's Jackson Hole Symposium. Amid data revealing entrenched inflationary pressures, market expectations have shifted, now pricing an 85% probability of a 25 basis point U.S. rate cut. Meanwhile, European Central Bank's interest rate expectations remain unchanged, with slight easing anticipated by year's end.

(With inputs from agencies.)