Euro zone bond yields rise ahead of German, French inflation data

Jan 6 (Reuters) - Euro zone government bond yields rose on Tuesday after falling the day before, as investors awaited inflation data from Germany and France later in the session.

Germany’s 10-year yields DE10YT=RR, the euro area’s benchmark, were up 2.5 basis points at 2.90%.

They climbed to 2.917% before Christmas, just a couple of bps shy of March highs, when Germany struck a political deal to ramp up infrastructure and defence spending.

Oil prices fell on Tuesday, further easing inflation concerns, as the market weighed the prospect of higher Venezuelan crude output following the U.S. capture of President Nicolas Maduro.

Money markets priced in around a 10% probability of a European Central Bank tightening move by December 2026 and about 30% by March 2027 . The depo rate is currently at 2%.

German 30-year yields DE30YT=RR were up 1.5 bps at 3.53%. They reached 3.556% on December 22, their highest level since July 2011, as long-dated debt prices came under pressure on expectations for heavier bond supply.

Yields on German 2-year Schatz DE2YT=RR, more sensitive to expectations for policy rates, rose one bp to 2.14%.

Italy’s 10-year government bond yields IT10YT=RR dropped 1.5 bps to 3.55%, with the gap versus Bunds at 64 after reaching 60 bps last week, its lowest since September 2008.