PHOTO
The Euro currency sign is seen in front of the European Central Bank headquarters in Frankfurt. Image used for illustrative purpose. Lisi Niesner, Reuters
LONDON - Euro zone bond yields ticked higher on Friday but remained slightly below multi-month highs, as investors gauged the progress of a parliamentary debate on a huge boost to German spending and the potential impact of U.S. tariffs on Europe.
Germany's 10-year bond yield, the benchmark for the euro zone bloc, rose 2.3 basis points (bps) to 2.88%.
The country's 10-year yield hit its highest since October earlier this week at 2.938% as investors continued to react to Chancellor-in-waiting Friedrich Merz's plans to spend much more on infrastructure and overhaul German debt rules.
Italy's 10-year yield increased by 1.8 basis points at 3.96%, and the gap between Italian and German bond yields stood at 107 bps.
The spread between U.S. 10-year Treasuries and German bunds stood at 142 bps after falling below 140 bps earlier this week, its lowest since July 2023.
U.S. bond yields have fallen due to concerns about the impact of President Donald Trump's tariffs on the economy.
Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, was up 1.7 bps at 2.2%.
(Reporting by Harry Robertson Editing by Gareth Jones)
