European long-term government bonds are advancing amid a surge in global risk-off sentiment.

The yield on the German 30-year bond fell by 3 basis points to 3.62%, while the two-year yield rose by 1 basis point to 2.78%.

The superior performance of long-term bonds has resulted in a steepening twist of the German yield curve.

Despite a decline on Friday, long-term bond yields have still risen for a third consecutive week, marking the longest such streak since the outbreak of the Middle East conflict.

While few in the market anticipate a rate hike at the upcoming European Central Bank policy meeting next week, traders are pricing in a 94% probability of a hike in September, with a high likelihood of another increase before the year's end.

UK government bonds also rose, supported by market expectations of a smooth transition in the prime minister's office. Andy Burnham was named Labour Party leader on Friday.

His fiscal and spending plans are under close scrutiny ahead of a potential appointment as Chancellor of the Exchequer.

Market Snapshot

The yield on the German benchmark 10-year bond decreased by 2 basis points to 3.12%.

The German Bund futures contract gained 20 ticks to 125.05.

The yield on the Italian 10-year bond was largely unchanged at 3.94%.

The yield spread between Italian and German bonds widened by 2 basis points to 83 basis points.

The yield on the French 10-year bond was also largely steady at 3.92%.

The yield on the UK 10-year gilt fell by 2 basis points to 4.95%.