<div id="readability-page-1" class="page">* German Bund yield drops as bonds rally globally * US Treasury yield falls after soft inflation data and AI worries * Analysts suggest bond rally may be nearing its limit (Updates with European afternoon trade) LONDON, Feb 17 (Reuters) - Germany's benchmark bond yield fell for a seventh ​session on Tuesday as the safe haven asset benefited from ‌some nervousness across markets around artificial intelligence, spillovers from global peers and the chance of one more European Central Bank ⁠rate cut later this year. The 10-year German Bund yield, the benchmark for the euro zone, was ⁠down 2 basis points at 2.735%, its lowest since early December, ‌and has fallen in ‌each session since February 9. It has been moving somewhat in sympathy with other markets in recent days. The 10-year ​U.S. Treasury yield dropped to 4.018% on Tuesday, ‌its lowest since late November, after U.S. markets were closed for the Presidents Day holiday on Monday. Softer U.S. inflation data on Friday and worries ​about AI disruption in the stock market have ​been helping ‌Treasuries. Meanwhile, Japanese yields dropped sharply on Tuesday, extending their move since Prime Minister Sanae Takaichi's big election win earlier this month. British government bond yields were also lower ⁠after soft labour market data. And Tuesday's European data did little to shift the ⁠focus back to the euro zone. German investor morale unexpectedly fell in February, the ZEW economic research institute said. However, the assessment of the current economic situation continued to improve, it said. Some analysts think the recent rally in government bonds could be nearing its limit. &#34;Fundamentally speaking, it ⁠would appear ‌to us that the latest yield move has got too far ‌ahead of itself,&#34; said analysts at DZ Bank in a note. They think yields will grind ⁠higher in the coming months as euro zone countries continue to issue large amounts of bonds, the economies improve, and the European Central Bank sees no need to adjust rates any time soon. Markets see the ECB as keeping rates steady across 2026, though they do see some chance of one further rate cut by year-end. Late last year, market pricing reflected expectations that the ECB's next move could be a ​hike, but futures imply about a 40% chance of a cut by the end of 2026. Other euro zone bonds were largely moving in line with the German benchmark. France's 10-year ​yield was down 2.5 bps at 3.318% ‌and Italy's was down to 3.359%. (Reporting by Alun John; Editing ​by Bernadette Baum and Susan Fenton)</div>

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Germany’s 10-year Bund yield fell for the seventh consecutive session, reaching 2.735%, influenced by global bond rallies and concerns over artificial intelligence. The U.S. Treasury yield also dropped to 4.018% following soft inflation data. Analysts warn that the bond rally may be nearing its limit, predicting yields could rise as euro zone economies improve and bond issuance increases. The European Central Bank is expected to maintain steady rates through 2026, with a slight chance of a rate cut by year-end.

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German 10-year yield falls for seventh session as bonds rally globally