Euro zone bond yields moved up from early declines on Tuesday as oil prices hovered around four-month lows and investors waited for developments on possible talks between in Qatar this week. European inflation data was also a concern.
Germany's 10-year bond yield (DE10YT=RR) rose 5 basis points to 2.91%, its highest in a week, after earlier falling to 2.876%. Yields move inversely to prices.
Germany's 2-year bond yield (DE2YT=RR), which is sensitive to European Central Bank rate expectations, slipped 0.8 basis point to 2.535%.
The U.S.-Iran peace deal has come under threat 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 slightly lower at $73.03 a barrel on Tuesday. It has fallen to near its lowest levels since the war started in late February as oil has begun to flow again through the Strait of Hormuz.
Bond traders were also watching euro zone June inflation data, with figures from France showing prices rose in the month by 2%, less than expected.
Data in Germany showed inflation cooled in May, nudging bond yields lower. Figures for the euro zone bloc are due on Wednesday.
But at the European Central Bank's annual conference in Sintra, Portugal, policymakers said the oil price shock would continue to affect the economy, and they remained concerned about inflation.
"Keeping a somewhat hawkish bias makes sense," said Michiel Tukker, rates strategist at ING.
"Only later this year will we have a better understanding of the second-round inflation impact and more certainty about the trajectory of oil."
Money markets are pricing in one more 25 bp rate hike from the ECB this year, after it raised rates earlier this month.