LONDON, July 31 (Reuters) - Euro zone government bond yields edged higher on Tuesday, rising off the day’s lows, after preliminary data showed that inflation in the bloc was higher than expected in July.
Headline consumer inflation accelerated to 2.1 percent year-on-year from 2.0 percent in June, while core inflation, which excludes energy costs as well as unprocessed food, rose to 1.3 percent year-on-year from 1.2 percent in June, beating economists’ expectations.
Germany’s 10-year government bond yield, the benchmark for the bloc, rose a basis point to 0.44 percent from 0.43 percent just before the release of the data.
Other euro zone bond yields also came off their lows, rising about a basis point across the board.
A long-term gauge of market euro zone inflation expectations, the five-year, five-year breakeven forward, extended its rise after the data.
The measure, followed closely by the European Central Bank, rose to 1.7454 percent - its highest level in over five weeks. (Reporting by Abhinav Ramnarayan; Editing by Dhara Ranasinghe)