Eurozone Bonds React to Inflation Data and Fiscal Policy Moves
Euro zone bond yields fell as investors adjusted ECB rate cut expectations following German inflation data. Retail sales and import prices underperformed, while Canada dropped its digital tax to revive U.S. trade talks. Germany's fiscal stimulus and NATO spending pose fiscal risks for Italy and Spain.
Euro zone government bond yields decreased on Monday as investors slightly increased their bets on European Central Bank rate cuts, following inflation data from German states.
Inflation dropped in three significant German states in June, signaling a potential decrease in Germany's national inflation rate. Italian EU-harmonised consumer prices fell slightly below a median forecast.
Meanwhile, German retail sales and import prices lagged expectations in May. Canada dropped its digital services tax aimed at U.S. tech firms to revive stalled trade negotiations with the U.S.
(With inputs from agencies.)
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- bonds
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- inflation
- Germany
- ECB
- retail sales
- trade talks
- fiscal stimulus
- NATO
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