Germany is readying an emergency budget worth more than 150 billion euros ($160 billion) to shore up jobs and businesses at risk from the economic impact of the coronavirus outbreak, the country's finance minister said on Saturday.
Expectations for higher spending across the euro zone have put upward pressure on bond yields, but those rises were also expected to be contained by the sharp rise in asset purchases announced by the European Central Bank last week.
"European government bonds should find support in the tug of war between giant supply prospects and massive central bank buying," said Commerzbank rates strategist Rainer Guntermann.
In early European trade, bond yields in the bloc's benchmark bond issuer, Germany, were down 1 to 2 basis points across the curve.
The 10-year Bund yield last traded at around -0.36pc, down more than 20 bps from last week's 10-month highs.
US Treasury yields were also lower. Italian 10-year borrowing costs were 3.5 bps higher on the day at 1.67pc.
Analysts said they would pay close attention to the European Central Bank's weekly update on bond purchases last week, which would provide a first indication of how strong the support from asset purchases was last week -- before the ECB's ramped-up bond purchases.