Eurozone Yields React to U.S. Inflation Data, Fed in Focus

U.S. inflation data shows a steady rise, fueling speculation of a Federal Reserve rate cut. The U.S. consumer price index increased by 0.2% in October. European markets adjust expectations for the ECB rates, with Germany's bond yields reflecting the sentiment. Analysts weigh prospects for future monetary policies.


Devdiscourse News Desk | Updated: 13-11-2024 19:43 IST | Created: 13-11-2024 19:43 IST
Eurozone Yields React to U.S. Inflation Data, Fed in Focus
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On Wednesday, Euro zone yields adjusted after U.S. inflation data suggested an anticipated Federal Reserve rate cut next month. The U.S. consumer price index (CPI) rose 0.2% in October, consistent for the fourth consecutive month, according to the U.S. Labor Department's Bureau of Labor Statistics.

In the year through October, the CPI advanced 2.6%, up from September's 2.4%. This led markets to increase the odds for a Fed rate cut in December to around 80%, up from 60% before the data release.

European investors adjusted their predictions for the European Central Bank's deposit rate, now at 1.9% for July. In Germany, government bond yields, sensitive to rate expectations, showed a slight increase. The 2-year bond yield rose 2 basis points to 2.15%, while the 10-year yield, serving as the euro area's benchmark, was up 1.5 basis points to 2.36%.

(With inputs from agencies.)

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