German Debt Is Scooped Up After Inflation Shows Cooling Signs

Investors will be glued to the ECB’s central-banking conference in Sintra, Portugal for clues on the outlook for monetary policy.

The Reichstag building in Germany, Berlin (Christoph Soeder/dpa via AP)

German bonds and their euro-area peers surged as investors scooped up the region’s debt after inflation in one German state fell in June for the first time since the start of the year, indicating a lower-than-forecast national figure.

Benchmark 10-year borrowing costs slumped by as much as eight basis points to 1.55%, while their Italian counterparts slid 12 basis points, narrowing the premium between the pair by five basis points.