European government bond yields across all maturities rose on Tuesday, with short-term yields leading the advance, as traders increased their bets on central bank interest rate hikes and crude oil prices rebounded above $80 per barrel.
The Houthi group launched a "large-scale" attack on the Saudi-backed Yemeni government forces, sparking concerns that the conflict between the US, Israel, and Iran could escalate into a broader regional war. This development also reduced the likelihood of a peace agreement being reached.
Market data shows: Germany's 10-year bond yield rose 3 basis points to 3.13%; the 10-year German Bund futures contract fell 20 ticks to 125.05; Italy's 10-year bond yield increased 2 basis points to 3.9%; the spread between Italian and German 10-year yields remained largely flat at 78 basis points; France's 10-year bond yield climbed 2 basis points to 3.92%; and the 10-year UK gilt yield advanced 4 basis points to 4.93%.
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