U.S. forces struck targets in Venezuela on Saturday and captured Maduro and his wife. U.S. President Donald Trump said he was putting the South American nation under temporary American control.
The yield on the German 10-year Bund, which serves as a benchmark for the wider euro zone, were marginally lower at 2.893%, having risen 3 basis points last week. At close to 2.9%, yields are around their highest since March last year.
Euro zone government bond yields held steady on Monday, after the U.S. strike on Venezuela and capture of President Nicolas Maduro at the weekend sparked a modest pickup in investor risk appetite that translated into gains in stocks and cryptocurrencies.
Two-year Schatz yields were down 2 bps at 2.151%.Deutsche Bank strategist Jim Reid said geopolitical events would likely remain at the forefront of investors’ minds, although in terms of market risk events, Friday’s U.S. monthly jobs report was key.
“Over in Europe, the main highlight will be the flash CPI prints for December, with Germany and France reporting on Tuesday, ahead of the euro area-wide print on Wednesday. This isn’t a print expected to have too many implications for near-term ECB policy, with markets expecting them to keep rates on hold for the rest of the year,” Reid said in a morning note.This week will also bring a raft of new bond supply in Europe. Commerzbank analysts estimate some 33 billion euros ($39 billion) will hit the market from Germany, France, Spain, Austria and Italy.
($1 = 0.8557 euros)
