Euro zone yields edge lower, eyes on US Federal Reserve

Euro zone bond yields ticked lower on Wednesday as traders eyed events beyond the currency bloc, digesting slightly lower-than-expected British inflation data and awaiting the conclusion of the Federal Reserve meeting later in the day.

Euro zone bond yields ticked lower on Wednesday as traders eyed events beyond the currency bloc, digesting slightly lower-than-expected British inflation data and awaiting the conclusion of the Federal Reserve meeting later in the day. ** Germany's 10-year bond yield, the benchmark for the eurozone, was last down 2 basis points at 2.42%.

** Yields have been rising for the past week as U.S. economic data remained strong causing investors to rein in bets on Federal Reserve rate cuts, maintaining the broad trend of much of 2024. ** The Federal Reserve concludes its policy meeting later on Wednesday. No change in rates is expected but traders are watching whether policymakers trim the number of their anticipated rate cuts this year to two 25 basis point cuts, from the three projected in December.

** Most developed market bonds have been moving in near lockstep this year meaning developments in the U.S. are important for euro zone bonds. ** British inflation cooled in February by slightly more than economists and the Bank of England expected, according to data on Wednesday that could give the central bank more confidence that it can cut interest rate cuts in the coming months. ** Germany's two-year yield dipped 1 bp to 2.88%. Italy's 10-year yield, the benchmark for the eurozone periphery was down nearly 5 bps at 3.67%.

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