LONDON: Euro zone bond yields fell slightly on Monday after climbing the previous week, as investors looked ahead to an expected interest rate cut from the European Central Bank on Thursday.

Germany’s 10-year bond yield, the benchmark for the euro zone bloc, fell 1 basis point to 2.26%.

France’s 10-year yield also fell by around 1 bp, moving in line with the rest of the market even after ratings agency Fitch revised France’s outlook to “negative” from “stable” on Friday, citing increases in fiscal policy and political risks.

Euro zone bond yields drop after 4-day rising streak

US bond markets were closed on Monday and the economic data calendar was sparse, leaving investors looking towards the ECB meeting on Thursday, where the central bank is expected to cut rates by 25 bps to 3.25%.

Italy’s 10-year yield was lower by 2 bps at 3.548%, and the gap between Italian and German yields stood at 128 bps. Germany’s two-year bond yield, which is more sensitive to ECB rate expectations, was down 3 bps at 2.232%.