Eurozone government bond yields were mostly slightly lower ahead of the release of the closely watched purchasing managers' survey data, which is expected to be slightly weaker.

Rainer Guntermann, interest rate strategist at Commerzbank Research, said today's slightly weaker PMI was unlikely to increase market expectations for an ECB rate cut in October, as the structural weaknesses of the German economy were well-founded, while French services sentiment was likely to be revised downwards after the Olympics.

Money markets are already betting the ECB will cut rates in October, with data from London-based Financial Markets Research Group putting the probability of a 25 basis point cut at 64%.