LONDON: German government bond yields were little changed on Tuesday after posting their biggest daily drop in a month overnight, as investor attention shifted to economic sentiment data due later and to the outcome of a crucial European Union appointment.
Yields on benchmark 10-year German debt were steady at minus 0.2930% in early London trading, after falling nearly five basis points overnight, its biggest drop in a month.
A survey from the ZEW institute later on Tuesday is expected to show the mood among German investors worsened in July. A previous survey showed it plunged in June.
Adding to the uncertainty is a vote to name Germany's Ursula von der Leyen president of the European Commission. She could become the commission's first female president, but her candidacy is being opposed by European Union socialist and liberal lawmakers.
"A rejection would definitely be a setback for the working climate in European institutions and markets will be firmly focused on the outcome for the vote," said Daniel Lenz, a rates strategist at DZ Bank in Frankfurt.
Broader bond markets were also quiet on Tuesday. Benchmark yields on 10-year U.S. Treasury debt were steady at 2.10% and not far away from a last week's one-month high of 2.15%.
Yields across global fixed income soared last week, with German bond yields hitting a 3 1/2-week high after industrial output and inflation data in Europe and the United States suggested pessimism on economic growth might be overdone.
But since then European yields have dropped as Italy led a rally in peripheral bonds, fuelling demand the debt.
Greece is due to sell a seven-year bond on Tuesday with Mizuho strategists expecting yields below 1.8%, compared with 4.7% highs seen last year.
"A good demand for Greek debt should further fuel a rally in peripheral bonds," Lenz said.
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