European Bonds Slide as Core Inflation in Euro Area Heats Up
- German 10-year yields on course for second weekly increase
- Report comes day after Draghi maintained dovish ECB stance
Draghi’s Degrees of Dovishness and Nod to the Downside
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European bonds tumbled as a report showed core euro-area inflation jumped to its highest in four years, just one day after European Central Bank President Mario Draghi warned that it remained too weak to begin tapering stimulus.
Yields on German 10-year bonds rose as much as six basis points following data that showed prices, excluding energy, food, alcohol and tobacco, rose 1.2 percent in April up from 0.7 percent last month and exceeding the 1 percent median forecast by economists in a Bloomberg survey. French 10-year securities also dropped, while yields on similar-maturity Spanish and Italian bonds climbed about six basis points.