Euro Zone Bond Yields Ease as Oil Prices Retreat Below $100
The euro zone bond market saw yields ease on Friday as investors re-assessed their outlook for inflation and interest rates after oil prices retreated below $100 per barrel.
This came after a multi-year high in yields, with Germany's benchmark 10-year government bond yield slipping about 1.5 basis points to 3.1965% after reaching a 15-year high of 3.2118% on Thursday.
The sharp increase in energy costs has reignited inflation concerns and prompted traders to increase bets on further monetary tightening by major central banks, including the European Central Bank (ECB).
The ECB kept interest rates unchanged on Thursday but left open the possibility of another rate increase in September, with several policymakers reiterating that inflation risks remain elevated.