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LONDON - Euro zone bond yields ticked up to their highest level in around a month on Monday as investors continued to try to gauge the outlook for central bank rate cuts in 2025.
The Federal Reserve last week put upward pressure on U.S. government bond yields, which set the tone for other markets around the world, when policymakers said they now expect to cut rates twice in 2025, down from a previous estimate of four cuts.
Germany's 10-year bond yield, the benchmark for the euro zone, rose 3 basis points (bps) to 2.32% on Monday, around the highest level since Nov. 22. Yields move inversely to prices.
Trading volumes were lower due to traders being off over the holiday season, potentially accentuating price moves.
Italy's 10-year yield was higher by 5 bps at 3.50%, and the gap between Italian and German widened 1.7 bps to 118 bps.
Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, rose 1.7 bps to 2.056%.
(Reporting by Harry Robertson; Editing by Kevin Liffey)