Euro zone government bond yields were mixed on Wednesday as investors awaited US consumer price index data later in the session and details of the outcome of trade talks between the US and China.
US and Chinese officials agreed on a framework to put their trade truce back on track while offering little sign of a durable resolution to longstanding trade differences.
The Consumer Price Index report from the Labor Department on Wednesday could show the CPI less the volatile food and energy components rising by the most in four months.
Germany’s 10-year yield, the euro area’s benchmark, was up 0.5 basis points (bps) at 2.54%.
Euro zone yields nudge higher, long-dated bonds under pressure
Money markets fully priced in a European Central Bank rate cut of 25 bps by December and an around 60% chance of the same move in September.
Two-year German yields rose 0.5 bps to 1.86%, while 30-year yields were flat at 3.00%. Italian 10-year yields rose 2.5 bps to 3.48%, leaving the gap between German and Italian yields at 88.5 bps.
The spread hit 86.70 bps on Tuesday its lowest level since February 2021.
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