Nov 26 (Reuters) - Euro zone government bond yields
edged up from the previous session's multi-week lows on Tuesday
as investors waited for inflation data this week that could
offer hints on European Central Bank's policy path.
Germany's 10-year bond yield, the benchmark for
the euro zone bloc, was up 1 basis point at 2.218%. It hit a
four-week low of 2.197% on Monday, mirroring a slide in U.S.
Treasuries after President-elect Donald Trump nominated hedge
fund manager Scott Bessent for U.S. Treasury secretary, fuelling
hopes for better fiscal discipline.
Bond prices move inversely to yields.
The mood in Germany's export industry improved slightly in
November as companies waited for more details on Trump's trade
policies, the Ifo economic institute's survey showed on Tuesday.
Trump, who announced plans for drastic tariff increases on
imports from Canada, Mexico and China on Monday, had said during
his election campaign that he would also place high tariffs on
goods from the European Union.
The prospect of higher tariffs at a time when euro zone data
is already worsening has raised bets of more aggressive policy
easing by the ECB.
The ECB's chief economist Philip Lane said the central bank
should not keep its monetary policy tight for too long or
inflation could fall below target.
A closely watched gauge of the market's long-term euro zone
inflation expectations has dropped sharply this month to levels
last seen in July 2022, nearing the ECB's 2% target.
Euro zone inflation data for November is due on Friday.
Germany's two-year bond yield, which is more
sensitive to rate expectations, was up 2 bps at 2.03%.
The gap between French and German yields - a
gauge of the premium investors demand to hold France's debt -
was at 81.4 bps after widening to a three-month high of 83.1 bps
on Monday.
Far-right leader Marine Le Pen issued a new threat on Monday
to bring down France's coalition government, after talks with
Prime Minister Michel Barnier failed to satisfy her party's
demands for budget concessions.
Italy's 10-year yield was 1.5 basis points
higher at 3.48%.