Bund Yields Steady Ahead of Crucial Inflation Data

The yield on Germany's Bund remains near six-month highs as markets await key inflation data from the euro zone and the U.S. This data could potentially influence central banks' decisions on rate cuts. German 10-year bond yields were little changed at 2.66%, while other European and U.S. bond yields showed minimal movement.

The yield on Germany's Bund, the euro zone benchmark, held steady near six-month highs in early trading on Friday, ahead of inflation data from both the euro zone and the United States which could offer clues about central banks' rate cut path. German 10-year bond yields, the benchmark for the euro zone bloc, were little changed at 2.66%, having touched 2.69% the day before, its highest since mid-November.

May inflation figures from the euro zone as well as the U.S. consumer price expenditure (PCE) index for April, the Federal Reserve's preferred inflation gauge, are both due on Friday. French inflation data released earlier on Friday and German and Spanish figures released already this week all came in slightly higher than expected.

Italy's 10-year yield was steady at 3.96%, and the gap between the Italian bonds and German bunds widened 0.2 basis points (bps) to 129 bps. The spread between U.S. 10-year Treasuries and German bunds widened 0.2 bps to 189 bps.

Germany's two-year bond yield, which is more sensitive to European Central Bank rate expectations, was little changed at 3.08%.