Euro zone bond yields steady before US inflation data
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 DE10YT=RR, 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 DE2YT=RR was also little changed at 2.394%.
Italy's 10-year yield IT10YT=RR was 0.5 basis points (bps) higher at 3.646%, keeping the yield gap between Italian and German bunds DE10IT10=RR at 141 bps.
Reporting by Samuel Indyk; Editing by Kirsten Donovan
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