Eurozone government bond yields edged higher in early trading, which may indicate limited room for further declines in yields.

Rainer Guntermann from Commerzbank stated in a report that concerns about oil, inflation, and the European Central Bank’s forum in Sintra, Portugal, may limit the downside for German government bond yields. “Although oil prices nearing pre-war levels have reduced tail risks for economic growth, inflation, and interest rate volatility, the pace of the inflation decline may not be fast enough to eliminate the European Central Bank’s hawkish stance,” said the rates strategist. Monday’s government bond supply will come from Belgium, which will auction between 260 million and 300 million euros worth of bonds maturing in 2034, 2041, and 2056 (OLO). According to Tradeweb data, the 10-year German government bond yield edged up by 0.9 basis points to 2.859%.