Euro Zone Bond Yields Dip Amid Economic Activity Data and Bond Issuance

Euro zone bond yields dipped slightly on Tuesday, just before the release of key data on the region's business activity alongside substantial government bond issuance.

Germany's benchmark 10-year yield was down by one basis point at 2.737%. Meanwhile, Germany's policy-sensitive two-year yield decreased by 0.5 bps to 2.013% after reaching its highest since April on Monday.

Anticipation is building for September's purchasing managers' index surveys from Germany, France, and the euro area bloc, as these figures are expected to indicate a continued economic recovery amidst political uncertainties in France and widespread tariffs. The PMIs are under the spotlight, with consensus suggesting eurozone aggregate PMIs will stay above 50, promoting a gradual growth recovery and supporting a rise in euro rates. Market participants are also bracing for a busy day of sovereign bond supply, including a Dutch 30-year paper considered a critical test for ultralong core duration, amid growing concerns over high government debt sustainability.

(With inputs from agencies.)