Eurozone Bond Yields Respond to Economic Data

On Monday, Eurozone government bond yields rose following new economic data, causing investors to slightly modify their expectations for the European Central Bank's future monetary easing actions. Germany's 10-year bond yield climbed 3.5 basis points while the gap between various Eurozone countries' yields fluctuated due to recent market developments.

Eurozone government bond yields experienced an uptick on Monday after fresh economic data prompted investors to adjust their expectations regarding future monetary easing measures by the European Central Bank (ECB).

Preliminary data revealed a decrease in inflation across several key German states in September. National data is expected later in the session, a day before Eurozone-wide figures. The Italian consumer price increase also slowed to 0.8% year-on-year in September. As a result, Germany's 10-year bond yield, a Eurozone benchmark, rose 3.5 basis points to 2.17%, having been down 0.5 basis points before the German statistics were released.

In contrast, data from France and Spain showed consumer prices rising less than expected in September, which led investors to anticipate future ECB rate cuts. Market speculation now includes 49 basis points of rate cuts by the ECB by the end of the year, down from around 53 basis points before the latest data. Germany's two-year bond yield, a key indicator of ECB rate expectations, increased by 3.5 basis points to 2.12%.

(With inputs from agencies.)