European bond yields remain stable, while the metal route keeps the markets in its grip

Yields on eurozone safe-haven government bonds were stable on Monday as precious metals markets roiled at the start of a week that will also include a European Central Bank interest rate decision. Silver and gold extended last week’s declines, falling about 10% and 6% respectively, prompting investors to sell other assets such as stocks to cover losses.CME Group raised margin requirements on several futures contracts, including gold and silver, contributing to the sharp sell-off in metals that started late last week after US President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve.

However, government bonds, which are generally considered safe havens, appeared largely unscathed. The German 10-year yield, the eurozone benchmark, has been stable recently at 2.8428%, while the two-year yield, which is more sensitive to interest rate expectations, has remained stable at 2.068%.

Investors were also looking forward to the ECB meeting later this week. While the central bank is widely expected to keep interest rates unchanged, markets will be watching closely for signs that the euro’s recent strength could influence policymaking going forward. Concerns that a stronger euro could intensify deflationary pressures and prompt the ECB to cut rates further emerged last week, pushing German two-year yields to their biggest monthly fall since April 2025. Inflation data for several eurozone economies, and for the bloc itself, are expected before the central bank meeting. Data from Germany showed on Friday that inflation in Europe’s largest economy rose slightly in January.