Euro zone bond yields dipped on Tuesday as oil prices hovered at around four-month lows, with investors eyeing potential talks between Iran and the U.S. in Qatar this week.
Germany's 10-year bond yield (DE10YT=RR) fell 1 basis point (bp) to 2.893%, to trade just above its lowest in four months. Yields move inversely to prices.
Germany's 2-year bond yield (DE2YT=RR), which is sensitive to ECB rate expectations, also slipped 1 bp to 2.532%.
The U.S.-Iran peace deal came under threat this weekend as both sides traded attacks, but the White House said it is sending envoys to Doha this week for further talks on the agreement.
Brent crude oil ICEEUR:BRN1!, the global benchmark, was down 1.4% at $72.35 on Tuesday. It has fallen to around its lowest levels since the war started in late February as oil has begun to flow again through the key Strait of Hormuz.
Bond traders were also watching euro zone June inflation data, with figures from France showing prices rose less than expected in June, at a 2% rate. Figures for the whole bloc are due on Wednesday.
The ECB's annual monetary policy conference in Sintra, Portugal, is also taking place this week, with Isabel Schnabel among the policymakers due to speak on Tuesday.
Money markets continued to price in one more 25 bp rate hike from the ECB this year, after it raised rates earlier this month.