German Bunds rise on weak oil prices

The German government bonds climbed with their European peers on Tuesday as cheap oil held inflation expectations below the levels seen before the European Central Bank unveiled its last monetary policy easing package, making 10-year Bund yields hit 4-week lows. 

Moreover, oil prices were up about 50 pct from 12-year lows hit in mid-February but they have been weakening in the past week. Brent crude fell 60 cents to $39.67. Also, most other euro zone bond yields were 3-7 bps lower.

Meanwhile, German 10-year yields, the benchmark for the region's borrowing costs, fell 3 bps to 0.15 pct, the lowest since March 1 and only slightly off this year's lows of 0.10 pct hit in February.

"Renewed pressure on inflation expectations (is) compounding the underlying risk-off sentiment," said Commerzbank rate strategist Rainer Guntermann.

In addition, markets will primarily focus on upcoming economic data as Germany is due to release inflation figures for March on Wednesday, while the data for the whole euro zone will be published on Thursday.