Euro zone bond yields fall to two-week lows on rate cut hopes

Euro zone bond yields fell for a fourth straight session on Tuesday as investors increased their bets on rate cuts from the Federal Reserve and the European Central Bank this year, following weak U.S. jobs data on Friday. Germany's 10-year bond yield, the benchmark for the euro zone bloc, fell 2.9 basis points to 2.45%, its lowest since April 19.


Italy's 10-year yield was lower by 2.8 basis points at 3.78%, and the gap between Italian and German bond yields widened 1.2 basis points to 132 bps.


The spread between U.S. 10-year Treasuries and German bunds widened 0.9 basis points to 203 bps.


Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, was down 1 bp at 2.9%. (Reporting by Harry Robertson; Editing by Andrew Heavens)