Euro zone bond yields dipped on Friday in cautious trade ahead of a first-round French presidential vote over the weekend.
On Friday, with little data to move the market and ECB policymakers having entered their quiet period where they refrain from comments that could influence policy expectations ahead of next Thursday’s meeting, markets were seeking direction.
After three straight sessions of rises that saw a rise of 16 basis points, Germany’s 10-year yield, the benchmark for the bloc, was down 2 basis points to 0.66% by 0711 GMT.
Italian 10-year yields were down 4 bps to 2.30% after rising 26 bps over the last three sessions.
Up 20 bps and underperforming the market on the back of volatility stemming from the French election, this week they are set for their biggest monthly rise in a month.
Markets this week started to acknowledge the possibility of far-right candidate Marine Le Pen winning the elections against incumbent Emmanuel Macron as her surge in the polls brought that outcome within the margins of error.
The first test for markets will be the first round of the presidential vote on Sunday.
“For today, that notion should mean limited risk taking,” ING analysts said in a note to clients.
French bond yields across the curve were flat to a basis point higher, slightly lagging peers on Friday. Bond yields move inversely with prices. (Reporting by Yoruk Bahceli; editing by Barbara Lewis)