They have rebounded somewhat in the last two weeks, due to strong economic data and central bank officials pushing back against that narrative. Tuesday's January U.S. consumer price index data will be closely watched by investors for its potential influence on the U.S. Federal Reserve. It is expected to show the headline year-on-year figure fell to 6.2% from 6.5% in December. Italy's 10-year bond yield was last down 2 bps at 4.190%. That pushed the gap between German and Italian 10-year yields down slightly to 182 bps. Many European Central Bank officials have argued against the notion that they could soon pause their interest rate hikes. Some have said they are concerned about core inflation, which remained at a record high of 5.2% in January. German policymaker Isabel Schnabel said on Friday that rates must still rise significantly. "We'll keep rates high until we see robust evidence that underlying inflation returns to our target," she said in a Twitter Q&A. Yet Italy's Ignazio Visco said on Saturday that the ECB should avoid pushing interest rates too high given the level of debt in the euro area. Italy's 2-year yield was 3 bps lower at 3.26% on Monday. Investors will also be keeping an eye on fourth-quarter euro zone employment and economic growth figures on Tuesday.
Speeches from central bankers, including New York Fed President John Williams on Tuesday, will be in focus as well.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro zone bond yields US and EZ inflation ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Harry Robertson; Editing by Emelia Sithole-Matarise, Nick Macfie and Alison Williams)
