LONDON: Ten-year bond yields in the euro area hovered near their highest levels in around two months on Tuesday, as rising US Treasury yields kept bond investors on edge over higher inflation and tighter monetary policy.

US 10-year Treasury yields rose to six-week highs and five-year yields hit their highest levels since early 2020, having jumped on Monday - the first trading day of the year.

While most euro zone bond yields dipped, they still held close to their highs, while British yields jumped as markets in London reopened after Monday’s holiday.

Germany’s 10-year Bund yield was a touch lower on the day at -0.15%, having briefly touched a new two-month high in early trade at around -0.12%. It rose almost 6 basis points on Monday in thin trade and was up 16 bps in December.