Euro Zone Bonds React to U.S. Inflation Trends

Euro zone bond yields slightly increased on Thursday after experiencing their steepest one-day drop since June, influenced by cooling U.S. inflation. Key focus was on Germany's and Italy's yields and ECB meeting outcomes regarding rate adjustments. Investors remain attentive to future ECB policy maneuvers.


Devdiscourse News Desk | Updated: 16-01-2025 13:28 IST | Created: 16-01-2025 13:28 IST
Euro Zone Bonds React to U.S. Inflation Trends
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Euro zone bond yields saw a marginal rise on Thursday, following a significant one-day decline not seen since June. The dip was triggered by cooling inflation in the U.S., providing a reprieve for the fixed-income market amid a global sell-off. Germany's 10-year bond yield, indicative of euro zone trends, rose by one basis point to 2.541% after dropping nine basis points on Wednesday.

The most recent data from December indicates a softening of underlying U.S. inflation, instigating Wednesday's sharp decline in global bond yields. Italy's 10-year yield also saw a modest increase of one basis point to 3.7%, with the spread between Italian and German yields reaching 115.3 basis points.

Attention shifts to the release of the European Central Bank's December meeting accounts, scheduled for later on Thursday. The ECB previously reduced interest rates by 25 basis points and signaled potential further easing. Germany's two-year bond yield, sensitive to ECB rate expectations, inched up by 0.5 basis points to 2.261%.

(With inputs from agencies.)

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