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Euro zone bond yields stabilize after volatility

Business & Finance

By Yoruk Bahceli3 Min ReadOct 21 (Reuters) - Euro zone bond yields steadied on Thursday as the market continued to calm from a sell-off that had sent bond yields and rate hike expectations shooting higher.Government bond yields across developed markets shot up in recent weeks, following hawkish turns from the U.S. Federal Reserve and the Bank of England (BoE).Further commentary from the BoE warning of the risks of inflation prompted investors to bet aggressively on an interest rate rise this year, pushing shorter-dated yields higher and longer-dated yields lower, flattening yield curves .Though the European Central Bank’s economic outlook suggests it won’t be able to raise rates for years to come, given the correlation between bond markets, those moves also pushed euro area rates higher and money markets started to price a full ECB rate hike next year.But markets are s

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