In the case of Greece, another economy on the verge of collapse just a few years ago, demand for sovereign debt has been boosted by hopes the country's credit rating will be upgraded this Friday. This follows Greece's successful return to the public bond market in April, and a one-notch upgrade to Portugal's rating last Friday.
Across the euro zone, yields are also being pressured lower by the European Central Bank's record-low base rate of 0.15 percent. The Bank is seen keeping interest rates low for the foreseeable future, and could yet use some form of quantitative easing, probably involving government bond purchases.
"This would presumably help to keep the yields of core euro-zone sovereign bonds low, even if they are dragged up slightly by developments overseas," said Jack Allen of Capital Economics in a research note on Monday. The economic consultancy forecasts yields for Bunds and Treasurys will diverge further, reaching 2 percent and 4 percent respectively by end-2016.