German bond yields edged lower in early Monday trading, though the spread between German and US Treasury yields remained near its tightest level in a month. The move followed comments from a senior Federal Reserve official suggesting potential December rate cuts, which buoyed US bond prices late last week.

New York Fed President John Williams stated on Friday that interest rates "could decline in the near term," prompting traders to quickly price in the possibility of a Fed rate cut in December.

The 10-year German bund yield, which had closed last week not far from its six-week high, fell 1 basis point to 2.688% in early Monday trading. The yield discount to comparable US Treasuries narrowed to 136.4 basis points - nearly the smallest gap since late October.

Regarding eurozone monetary policy, European Central Bank Governing Council members Madis Müller and Martin Kocher noted during a Friday panel discussion that the ECB expects inflation to temporarily stabilize around its 2% target, while still calling for vigilance.

"While the ECB remains on hold, we believe the macroeconomic outlook, though weak, hasn't deteriorated enough to warrant changes to its rhetoric or policy stance. The meeting minutes should provide fresh insights into how the Executive Board views risks to the economic outlook," Jefferies analysts noted.

Germany's business sentiment survey is scheduled for release Monday, with the Ifo Institute's November business climate index expected to show a slight improvement to 88.5 from October's 88.4.