German 10-year yield falls again as market awaits key data this week

By Sophie Kiderlin

LONDON, Feb 16 (Reuters) - Euro zone bond yields hit their lowest level since early December on Monday, down for a sixth trading day as the market kicked off a week packed with key economic data.

German 10-year yields, the benchmark for the euro zone, were last down by one basis point to 2.7468%, at levels last seen in early December as yields eased for the sixth trading day in a row. It marked the longest winning streak for the German 10-year bond since late November 2024, as bond yields move inversely to prices. DE10YT=RR

Last week, German 10-year yields fell around 9 basis points, their biggest weekly decline since March.

The week ahead is set for a calm start with market holidays in various regions, including the U.S. and parts of Asia. Several key data points are nonetheless expected later in the week, which traders will be watching closely as they could impact European Central Bank monetary policy expectations.

Money market bets on an ECB rate cut by December were last at just under 40%, having picked up on Friday following U.S. inflation data.

German two-year yields, which are sensitive to interest rate expectations, were last little changed at 2.0531%. DE2YT=TRR

Several final readings of consumer price data from major euro zone economies are due this week, as well as fresh PMI figures across the bloc. Markets will also be watching out for key U.S. data, including the personal consumption expenditures price index, an inflation gauge which is widely seen as crucial to the Federal Reserve's decision making.

Elsewhere, weaker-than-expected Japanese economic data saw traders temper bets for an early interest rate hike from the Bank of Japan. The country's Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda are set to meet on Monday for the first time since the ruling party's landslide election win last week.