Euro zone bond yields dip on inflation relief, lower oil

Investors are still watching discussions between Washington, Tehran and mediators on any end to the Iran war and the potential reopening of the Strait of Hormuz, although a deal appears to be out of reach with attacks on ships occurring this week and both sides stepping up their rhetoric.

The stalemate is keeping oil prices elevated, although well below their highs from May.

On Thursday, Brent was down about 1% to $88 per barrel, although that was still up about 45% from its pre-war level.

Economists and investors polled by Reuters expect the European Central Bank to raise interest rates once more next month, as high energy prices push inflation further from the bank's 2% target.

Markets are pricing in around a 90% chance of a quarter-point rate hike at next month's meeting.