The spread of the more infectious Delta variant is the key emerging threat for the time being, with COVID-19 cases on the rise again at the global level and in most of the G7 economies.
The ECB has missed its goal of keeping price growth "below but close to 2%" for a decade despite massive money printing, negative rates on deposits and subsidised loans to banks.
Though yields started the week higher, they stayed far below recent highs, as expectations of a dovish tone from the European Central Bank at its June 10 meeting continued to drive the market.
Inflation has been bond investors' key focus this year, driven higher by pent-up demand and supply constraints as economies re-open, and whether it will be transitory as central bankers argue.
Euro zone inflation accelerated as expected in April because of a sharp rise in the costs of energy and services, data showed. British consumer price inflation more than doubled in April.
A key gauge of euro zone inflation expectations - the five-year, five-year inflation forward - rose to its highest since December 2018.