Euro zone yields mixed before German vote on spending plans, Fed
By Stefano Rebaudo
March 17 (Reuters) - Euro zone government bond yields were mixed on Monday ahead of a German parliament vote on the country's spending plans on Tuesday in a week packed with central bank policy meetings.
On Wednesday, the Federal Reserve and the Bank of Japan will announce their rate decisions, followed on Thursday by the Bank of England, the Riksbank and the Swiss National Bank.
Germany's 10-year government bond yields DE10YT=RR were down 0.5 basis points (bps) at 2.87%. They hit 2.938% last week, their highest level since October 2023.
Traders priced in an ECB depo rate of about 2.05% in December EURESTECBM6X7=ICAP from 2.02% last week. They also accounted for an around 50% chance of a 25 bps cut in April.
Germany's 2-year yield DE2YT=RR, more sensitive to European Central Bank policy rates, was flat at 2.19%. It hit 2.319% two weeks ago, its highest since mid January.
The yield gap between Italian and German bonds DE10IT10=RR - a market gauge of the risk premium investors demand to hold Italian debt – was at 106 bps.
The spread between French and German bonds DE10FR10=RR stood at 67 bps, at the lower end of its recent range, after S&P left French rating unchanged, but revised its outlook to negative from stable.
