German yields fall for seventh straight session as bonds rally globally

LONDON, Feb 17 (Reuters) - Germany's benchmark bond yield fell for a seventh straight session on Tuesday as the safe haven benefited from some nervousness across markets around AI, spillovers from global peers and the possibility of one more ECB rate cut later this year.

The 10-year German Bund yield, the benchmark for the euro zone, was down 2 basis points at 2.73%, around its lowest since early December, and down in each session since February 9. DE10YT=RR

It has been moving somewhat in sympathy with other markets in recent days and the 10-year U.S. Treasury yield dropped 3 bps to 4.02% on Tuesday, its lowest since late November, after U.S. markets were closed for a holiday on Monday. US10T=RR

Softer U.S. inflation data on Friday and worries about AI disruption in the stock market have been helping Treasuries. {US/}

Meanwhile, Japanese yields dropped sharply on Tuesday, extending their move after Prime Minister Sanae Takaichi's big election win earlier this month. British government bond yields were also lower after soft labour market data. GB/ JP/

Small changes in expectations for European Central Bank policy are also in the mix for euro zone bonds. Markets currently see around a 40% chance of one more ECB rate cut across 2026. 0#EURIRPR

Late last year market pricing reflected expectations that the ECB's next move would be a hike.

Shorter-dated German yields moved in line with the benchmark, with the two-year yield 2 bps lower at 2.03%. DE2YT=RR