European government bonds have pared losses after starting the day deep in the red.

French 10-year bond yields slipped to 4.82% after reaching 4.96% earlier in the day. Yields fall as prices rise. German bonds are now up on the day, while Greek and Italian bonds pared losses. Analysts pointed to multiple drivers behind the turnaround:

-- A French auction of government bonds this morning went smoothly and eased market jitters about demand for the country's debt, according to analysts.

-- France's government also released its 2027 budget that contains nearly $50 billion in spending cuts, in an effort to bring down the fiscal deficit to 5%. French bonds have been hit particularly hard by the global bond selloff as investors questioned the government's willingness to cut spending.

-- European officials are discussing releasing diesel stockpiles amid a shortage of the fuel, according to a Reuters report. That helped ease some worries about inflation and led investors to trim some bets that the ECB will raise rates again.