LONDON, Aug 13 (Reuters) – Euro zone bond yields were
little changed on Tuesday as the recent volatility in financial
markets continued to ebb, with markets waiting for U.S.
inflation data for hints on when the Federal Reserve might ease
policy.
Focus is turning to today’s U.S. producer price data and
tomorrow’s consumer price figures, with markets on the lookout
for signs that inflation is slowing enough for the Fed to lower
rates next month.
Futures markets are currently evenly split on whether the
central bank will lower borrowing costs by 25 or 50 basis points
in September, having last week fully priced in a half-point move
when concerns about the U.S. economy sent bond yields and stocks
tumbling.
Germany’s 10-year bond yield, the benchmark for
the euro zone, was steady at 2.227%. It hit its lowest since
January at 2.074% last week.
Germany’s policy-sensitive two-year yield was
also little changed at 2.394%.
Italy’s 10-year yield was 0.5 basis points (bps)
higher at 3.646%, keeping the yield gap between Italian and
German bunds at 141 bps.
(Reporting by Samuel Indyk; Editing by Kirsten Donovan)
