The stability in euro zone bonds comes amid expectations that the Fed will cut rates, possibly prompting similar actions from the ECB. Germany's 10-year yields, seen as a regional benchmark, edged up to 2.136%, a minor 1.6 basis point rise. Since early September, these yields have decreased nearly 20 basis points, reflecting market anticipation. Additionally, two-year Schatz yields nudged up to 2.193% by 1 basis point. The ECB recently trimmed interest rates and may opt for another 25-basis point cut in December rather than October. Market sentiment suggests a near-70% chance the Fed will cut rates by 50 basis points on Wednesday, potentially paving the way for the ECB's next steps.

Euro zone bond yields' steadiness hints at market confidence in a coordinated central bank approach to monetary policy. Italian 10-year yields stayed flat at 3.48%, with the spread over German Bunds unchanged at 134.2 basis points. Investors seeking stability amid global economic shifts may find euro zone bonds a predictable haven for now.

The bigger picture: Global economic pulse.

The Fed's rate decision will likely ripple through global markets, particularly affecting ECB policies. Germany's ZEW index, measuring economic sentiment, is expected to dip to 17 from 19.2 in August, hitting its lowest since January. This indicator, due at 0900 GMT, underscores prevailing economic uncertainties as central banks navigate their next moves.