Euro zone bond yields edge lower as Biden abandons electoral race

Biden announced on Sunday he would be abandoning his reelection bid and face off against former President Donald Trump, under growing pressure from fellow Democrats as concerns mounted about his age and health.

Vice President Kamala Harris is now favourite to win the Democratic nomination and challenge Trump at November's election.

Germany's 10-year yield DE10YT=RR, the benchmark for the euro area, was last down less than 1.5 basis points (bps) at 2.447%.

Germany's two-year yield DE2YT=RR, which is more sensitive to changes in monetary policy expectations, was little changed at 2.775%.

The European Central Bank last week kept its policy settings unchanged, and its president, Christine Lagarde, said its next decision on Sept. 12 was "wide open".

Italy's 10-year yield DE10IT10=RR was down 1 bp at 3.762%, keeping the closely watched 10-year yield gap between Italy and Germany - a gauge of risk investors require to hold Italian bonds - steady at 130 bps.