LONDON, June 7 Reuters Euro zone government yields were steady near onemonth lows on Monday, with a looming European Central Bank meeting pushing investors to the sideline for now.
Borrowing costs across the bloc fell on Friday after a closelywatched U.S. jobs report fell short of expectations, calming worries that a roaring economy could lead the Federal Reserve to taper its stimulus soon.
But calm returned at the start of a new week, with direction in euro zone debt markets seen limited ahead of Thursdays ECB meeting when the central bank will review the pace of emergency bond buys that it jacked up in March to prevent a rise in borrowing costs hurting a recovery.
Germanys benchmark 10year bond yield was flat on the day at 0.21, holding near an almost onemonth low hit after Fridays U.S. jobs data. French and Dutch 10year bond yields also held near recent lows.
The bar for dovish ECB surprises seems high after the disappointing U.S. payrolls pushed 10year Bund yields through 0.20, said Commerzbank rates strategist Michael Leister.
Dovish rhetoric from ECB policymakers suggests they are in no hurry to slow the pace of buying under the 1.85 trillion euro 2.24 trillion Pandemic Emergency Purchase Programme PEPP.
Yet, with the economy on a sounder footing, inflation picking up and other central banks taking tentative steps to slow stimulus, pressure to taper is building. In the meantime, Germany attracted some attention. Chancellor Angela Merkels conservatives won a…