… rising interest rates?
Government bonds with fixed interest rate fall when interest rates are rising. Government bonds with floating interest rate, on the other hand, benefit from rising interest rates. Given that these bonds ("floaters") have their interest rate periodically adjusted to a referential rate such as the EURIBOR, an increase in the level of interest rates also means a rising interest rate for the bonds. The price of the bond tends to oscillate around face value.
… stable interest rates?
In the case of stable interest rates, neither the price nor the coupon of government bonds changes (if other criteria, e.g. the rating of the issuer, stays unchanged).
… falling interest rates?
Government bonds with fixed interest rate increase when interest rates are falling. Falling interest rates, on the other hand, have a negative impact on government bonds with floating interest rate. Given that these bonds ("floaters") have their interest rate periodically adjusted to a referential rate such as the EURIBOR, a decrease in the level of interest rates also means a falling interest rate for the bonds. The price of the bond tends to oscillate around face value.