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Euro zone bond yields steadied on Tuesday after a recent run of declines, as investors awaited U.S. inflation data that could offer hints on the Federal Reserve's rate-cutting path and the European Central Bank's (ECB) policy decision later this week.
The German 10-year bond yield, the benchmark for the euro zone bloc, was little changed at 2.178%. It touched a one-month low of 2.147% on Friday.
Meanwhile, Germany's two-year bond yield, which is more sensitive to changes in ECB rate expectations, was flat at 2.224%. The yield also touched a more than one-month low of 2.208% on Monday.
The ECB is all but certain to cut rates by 25 basis points on Thursday, with investors seeking clues on what action the central bank might take after that. A widely anticipated debate between U.S. presidential candidates Kamala Harris and Donald Trump and U.S. inflation data on Wednesday will be among the other main catalysts for markets.
Meanwhile, Italy announced the sale of up to 6.50 billion euros in bonds on Monday.
Italy's 10-year yield was higher by 1 basis point at 3.558%, and the gap between Italian and German Bunds stood at 137 bps.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Amanda Cooper)