Euro Zone Yields Trimmed Amid Fed Interest Rate Speculations

Euro zone government bond yields experienced a slight decrease on Thursday following new U.S. economic data that increased investor speculation about forthcoming Federal Reserve interest rate cuts. This comes as inflation rates moderated, leading to potential rate cuts by the ECB and Fed, influencing borrowing costs across Europe.

Euro zone government bond yields saw a slight reduction on Thursday. The shift followed the release of U.S. economic data, prompting investors to speculate on upcoming Federal Reserve interest rate cuts. September recorded a modest rise in U.S. consumer prices, marking the smallest annual increase in over 3.5 years.

Germany's 10-year bond yield, a key European benchmark, increased by one basis point to 2.26% after peaking at 2.282% earlier in the session. Money markets adjusted expectations, pricing in 46 basis points of U.S. rate cuts by year-end, up from 43 basis points.

European Central Bank policymakers expressed satisfaction with decreasing euro zone inflation, yet remained cautious about easing policies due to domestic price pressures. Speculation grows ahead of potential rate cuts by both the ECB and Fed, as detailed in recent policy meeting minutes.

(With inputs from agencies.)