Euro Zone Bond Yields Hold Steady Ahead of Key Inflation Data

Euro zone bond yields remained stable as investors awaited crucial inflation data from Europe and the U.S. This information could influence borrowing cost decisions by the European Central Bank and Federal Reserve. Notable figures include Germany's 10-year and two-year bond yields, and Italy's 10-year yield.

Euro zone bond yields were holding steady on Tuesday before key inflation data from Europe and the U.S. later in the week that could help determine how much the European Central Bank and Federal Reserve lower borrowing costs this year. First up are German consumer prices data on Wednesday, then euro area-wide figures on Thursday and U.S. personal consumption expenditure data, the Fed's targeted inflation measure, on Friday.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, was little changed at 2.545%. Italy's 10-year yield was higher by 0.5 basis points (bps)​ at 3.84%, and the gap between Italian and German bunds stood at 128 bps.

Germany's two-year bond yield, which is more sensitive to ECB rate expectations, was little changed at 3.04%. The spread between U.S. 10-year Treasuries and German bunds narrowed to 190 bps.