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The five-year, five-year break even forward, a key market gauge tracked closely by the European Central Bank, fell to as low as 1.4332 percent. The ECB targets inflation at close to 2 percent.
The latest lurch down in market inflation expectations follows a dive in German 10-year government bond yields below zero percent for the first time since 2016. That followed a survey on Friday showing German manufacturing contracting for a third straight month.