Euro zone bond yields steady after recent climb

Euro zone government bond yields paused on Wednesday, taking a break from this year's upwards trend, as traders kept an eye on remarks by European Central Bank policy makers for clues about how soon they will start cutting interest rates. The euro zone benchmark yield dropped around 80 bps in November and December but has risen more than 15 bps in January, as traders first moved to price in significant rate cuts from major central banks in Europe and the United States in 2024 on the back of slowing inflation, and then, this year, reassessed those calls. Market pricing now reflects around a 40% chance of the European Central Bank cutting interest rates in March.