Euro zone government bond yields edged down on Monday as investors braced ‍for a slew ‍of economic data from both Europe and the United States.

The U.S. strike on Venezuela ​and capture of President Nicolas Maduro at the weekend sparked a pickup in investor risk appetite that translated into gains ⁠in stocks and cryptocurrencies.

In Europe, attention will turn to preliminary December inflation figures, with readings from Germany and France ⁠due on Tuesday ‌and a euro zone-wide report scheduled for Wednesday.

"Our more upbeat view on 2026 gross domestic product growth led to a modest upward revision to our core inflation forecast, but ⁠we are still looking for a further deceleration in core harmonised index of consumer prices (HICP) inflation to 1.8% on average in 2026," said Giada Giani, an economist at Citi.

"We pencil a step lower in headline HICP inflation in December, back to 2.0%, while core may stay put at 2.4% ⁠but with risks tilted to the downside," ​she added.

In the U.S., the spotlight will be on Friday’s December jobs report, while investors also await Wednesday’s ADP employment and JOLTS ‍data. The ISM indices are due earlier this week.

The yield on the German 10-year Bund, which serves as a benchmark for ​the wider euro zone, dropped 1.5 basis points (bps) to 2.90%, having risen 3 basis points (bps) last week. It climbed to 2.917% before Christmas, just a couple of bps shy of March highs, when Germany struck a political deal to ramp up infrastructure and defence spending.

Investors were also focused on Germany’s fiscal stimulus, which is expected to increase bond supply, pushing prices lower and yields higher.

Two-year Schatz yields were down 3.5 bps at 2.14%.

Deutsche Bank strategist Jim Reid said geopolitical events would likely remain at the forefront of investors' minds, although in terms of market risk events, Friday's U.S. monthly jobs report was key.

"This isn’t a print expected to have ⁠too many implications for near-term ECB policy, with markets expecting them ‌to keep rates on hold for the rest of the year," Reid said in a morning note, referring to the euro area's inflation data.

This week will also bring a raft of new bond supply ‌in Europe. Commerzbank ⁠analysts estimate some 33 billion euros ($39 billion) will hit the market from Germany, France, Spain, Austria and Italy.

($1 = 0.8557 euros)

(Reporting ⁠by Stefano Rebaudo and Amanda Cooper; Editing by Toby Chopra and Peter Graff)