LONDON: Euro zone bond yields fell on Friday as investors tried to reduce risk before the weekend after reports of an Israeli attack on Iranian soil.

Israel launched an attack on Iran on Friday, sources said, in the latest exchange between the two adversaries, whose decades of shadow war has broken out into the open and threatened to drag the region deeper into conflict.

German 10-year bond yields, the benchmark for the euro zone bloc, fell 3.4 basis points (bps) to 2.46%, moving away from a more than six-week high touched on Tuesday.

Euro zone bond yields hold steady after Monday’s rise

Italy’s 10-year yield was lower by 2.1 bps at 3.86%, and the gap between Italian and German bunds narrowed 0.9 bps to 139 bps, after briefly hitting 144.9, its highest point since early March.

The spread between US 10-year Treasuries and German bunds narrowed 2 bps to 212 bps, touching its lowest level in 9 days.