Germany's 10-year bond yield started the week just off a two-week high, even as short-dated yields remained in check, as the combination of worries about the longer term outlook and not much activity expected from the European Central Bank has caused yield curves to steepen.
The euro zone benchmark touched 2.93% in early trade on Monday, its highest since June 23, and was last at 2.92%, down one basis point on the day. (DE10YT=RR)
It rose by eight basis points last week, influenced by a move higher in U.S. and Japanese yields and as traders' attention shifted to the longer term outlook. Yields fell in the immediate aftermath of the interim U.S.-Iran deal as the oil price, and inflation expectations fell.
That remained the focus for short-dated rates, however, as they are particularly linked to ECB policy. The German two-year yield was at 2.53%, flat on the day. The gap between Germany's two- and 10-year yields hit its highest in a month last week. (DE2DE10=RR)
Money market pricing currently sees one more ECB rate hike as likely, but not certain.
The coming week has no top tier economic data from either the euro zone or the U.S.
The minutes of the ECB and Federal Reserve meetings for June will be released and there are several pieces of German business activity data.
Other euro zone yields were moving roughly in line with the benchmark. Italy's 10-year yield dipped nearly two bps to 3.70%. France's dropped one basis point to 3.71%. (FR10YT=RR), TVC:IT10Y