Euro area benchmark Bund yields edged lower and French and Italian debt risk premiums fell slightly on Monday, as energy prices were mixed after US President Donald Trump unveiled a limited ceasefire between Russia and Ukraine. Investors are increasingly betting that Middle East tensions will remain contained, reducing the risk of an energy price spike ahead of the November US midterm elections.
Germany’s 10-year government bond yields, the euro area benchmark, were down 2 basis points (bps) to 3.47 per cent. Trade was thin with Japanese markets shut and the US on a partial holiday. German 2-year government bond yields, which are more sensitive to policy rate expectations, fell 0.5 bps to 3.09 per cent.
