Euro zone yields steady after hot US inflation jolts bonds
TLT•TLT•TLT•TLT•Euro zone yields edged lower on Wednesday after a hot US inflation report had pushed German 10-year yields up 4 basis points on Tuesday. Germany’s 10-year yield was 3.302%, while France’s fell 2 basis points to 4.764%.
Germany’s 10-year bond yield, the bloc’s benchmark, was slightly lower at 3.302% on Wednesday. France’s 10-year yield fell 2 basis points to 4.764%, and the spread between French and German yields narrowed slightly to 146 basis points, from 178 in October.
US inflation data showing price pressures rose more than expected in October sent 10-year US borrowing costs up 12 basis points on Tuesday, while Germany’s 10-year yield gained 4 basis points. Traders now see a December Federal Reserve rate increase as certain and an European Central Bank hike as almost guaranteed. ECB chief economist Philip Lane said it would be “prudent” to raise rates in December if the data does not meaningfully change.
