Euro Zone Bonds Tread Water Amid U.S.-China Trade Talks

Euro zone bond yields presented a mixed picture on Wednesday with markets eyeing imminent U.S. consumer price data and developments in U.S.-China trade discussions. China's Vice Premier He Lifeng emphasized enhanced communication between China and the U.S. to revitalize a fragile trade agreement, as reported by Xinhua.

Benchmark 10-year German yields increased by 1.5 basis points to 2.55%, with wage growth forecasts across the euro zone at 3.1%. The European Central Bank noted this growth aligns with its 2% inflation target. Meanwhile, money markets priced in a probable ECB rate cut by year-end, as inflation aims to rebound.

Market dynamics saw varied bond yields, reflecting diverse investor sentiment. U.S. CPI figures are awaited, which could influence the Federal Reserve's approach amidst controlled tariff impact. Across other markets, British gilt yields rose, preceding a budget address by finance minister Rachel Reeves regarding future government spending plans.

(With inputs from agencies.)