Euro zone yields nudge up from one-month lows

Germany's 10-year yield, rose nearly 2 basis points in early trading to 2.82% but the euro zone benchmark is still down ​over 7 bps this week so far. Bond yields move inversely ‍to prices, and Germany's 10-year yield touched a one-month low of just under 2.8% on Wednesday after data showed euro zone inflation slowed to 2% last month.

Euro zone bond yields held close to one-month lows on Thursday, having dropped ‌this week as softer than expected inflation data caused traders to reconsider interest rate bets that pushed yields ⁠to multi-month highs late last year. Germany's 10-year yield, rose nearly 2 basis points in early trading to 2.82% but the euro zone benchmark is still down ​over 7 bps this week so far.

Bond yields move inversely ‍to prices, and Germany's 10-year yield touched a one-month low of just under 2.8% on Wednesday after data showed euro zone inflation slowed to 2% last month. Investors ⁠expect the ‌ECB to ⁠keep its policy rate steady throughout this year, but the recent data has shifted ‍the discussion on to the small chance of another rate cut, as opposed to ​late last year when traders were considering the slight prospect of a ⁠rate hike this year.

That potential rate hike, and broad worries about the scale of ⁠borrowing around the world pushed Germany's 10-year yield up 17 bps in December to its highest since March. "Short positions in Bunds ⁠had started to become stretched and some pullback was due," said Mohit Kumar, ⁠chief economist for ‌Europe at Jefferies.

France and Italy's 10-year yields were also each up nearly 2%, with France's at 3.54% and ⁠Italy's at 3.49%.

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