The yield on eurozone government bonds remained almost unchanged amid easing concerns about the consequences of the spread of the Omicron strain. Market participants also focused on the prospects of the world's major central banks.
The yield on Germany's 10-year government bonds rose by 0.12 basis points, to -0.232%. Meanwhile, the yield on 10-year Italian government bonds rose by 2.5 basis points, to 1.153%.
"Given reports that the Omicron strain reduces the risk of hospitalization and serious illnesses, we believe that governments will be able to cope with the pandemic. However, central banks are likely to remain committed to tightening policy to curb rising inflation," said Andrea Delitala, an expert at Pictet Asset Management.
"As for Italy, the bond market is following the news about whether Mario Draghi will remain as prime minister or become president of the country," said Thomas Wacker, an expert at UBS Global Wealth Management.
Analysts have warned of a potential increase in the risk premium in Italy if Draghi is elected president, but added that snap elections are the worst-case scenario. Analysts also noted that political uncertainty could negatively affect the value of bonds.