LONDON: Euro zone bond yields eased in early trading on Monday, with investor focus on the inauguration of Donald Trump as US president and the raft of executive orders he has pledged to sign on day one.

Trump will be sworn back in as president at midday (1700 GMT/1800 CET) in Washington, D.C. after four years away and has promised a flurry of executive actions concerning immigration, energy and tariffs early in his presidency.

Germany’s 10-year bond yield, the benchmark for the euro zone bloc, slipped 1.1 basis points (bps) to 2.49% in early trading. Yields move inversely to prices.

US bond and stock markets are closed for Martin Luther King Jr. Day. “(The) market is waiting for the host of executive orders that are likely to be signed in the first day of the Trump presidency,” said Mohit Kumar, European economist at Jefferies.

“Focus would be on policies around tariffs, immigration and deregulation.”

Italy’s 10-year yield was lower by 1 bp at 3.63%, and the gap between Italian and German yields stood at 113.6 bps.

Bond yields around the world rose sharply to multi-month highs in the first two weeks of the year as strong US economic data pushed up US Treasury yields, which tend to drive markets, and investors worried about the potentially inflationary effect of Trump’s tariffs.

Euro zone bond yields hold steady, down from six-week high

Yet they fell back last week after data showed underlying US inflation slowed more than expected in December. Germany’s two-year bond yield, which is sensitive to European Central Bank rate expectations, was down 1.3 bps at 2.22%.

Investors were also watching the progress of the Israel-Hamas ceasefire which took hold on Sunday. Hamas released three Israeli hostages and Israel released 90 Palestinian prisoners on day one of the truce.