Euro zone benchmark Bund yields rose on Monday as investor anxiety over U.S.-China trade tensions and the health of U.S. regional banks eased, slowing the recent flight into safe-haven assets. Benchmark Bund yields recorded their fourth straight weekly drop on Friday. Market participants are closely watching Wall Street futures, which were up 0.34% in early London trade, after indexes ended higher on Friday.

Germany’s 10-year Bund yields were up 0.5 basis points at 2.58%. They hit 2.523% on Friday, their lowest since June 25. They ended the week 5.5 basis points lower.

Money markets ramped up bets on European Central Bank rate cuts last week, amid concerns that trade tensions and credit stress could weigh on economic growth.

They priced in about a 70% chance of a 25-basis-point ECB rate cut by July, up from around 70% on Friday. The key rate is seen at 1.83% in December 2026 from the current 2%.

Germany’s 2-year yields, more sensitive to expectations for ECB policy rate outlook, rose 0.5 bps to 1.92%.

The yield gap between safe-haven Bunds and 10-year French government bonds — a market gauge of the risk premium investors demand to hold French debt — widened to 78.50. It hit 87.96 bps earlier this month, the highest level since January 13, on concerns about the French fiscal outlook but fell to below 75 bps after Prime Minister Sebastien Lecornu survived two no-confidence votes in parliament on Thursday.

(Reporting by Stefano Rebaudo; Editing by Louise Heavens)