European Government Bond Yields Remain Close to Multi-Week Lows

European government bond yields remained near multi-week lows on Friday. This trend followed a sell-off in global technology stocks, which drove investors toward relatively safer assets and increased demand for government bonds.

Germany's 10-year government bond yield, considered the benchmark for the eurozone, stood at 3.404%. The figure remained close to the more-than-one-month low recorded in the previous trading session, as investors sought protection from increased volatility in equity and credit markets.

At the same time, Germany's two-year government bond yield fell to 3.059%. This marked the third consecutive daily decline in the indicator. On Thursday, it dropped to its lowest level in more than a week.

A decline in bond yields typically reflects rising demand for their price: when investors buy bonds, their price increases while yields fall.

The current trend indicates that investors are once again increasing the share of long-term government bonds in their portfolios. Such assets are used as a means of balancing portfolio risks during periods of instability in equity and credit markets.

In recent months, stock and bond prices have often fallen simultaneously, which was linked to the impact of high interest rates. Now, weakness in the technology sector has strengthened demand for government bonds.