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"The higher than expected month-on-month CPI in Spain triggered the rise in yields in Europe," said Jussi Hiljanen, head of European rates strategy at SEB. Jan von Gerich, chief analyst at Nordea, said: "Even though the ECB has played down the importance of individual near-term inflation releases, the market certainly cares." Germany's 2-year yield, which is highly sensitive to interest rate expectations, rose 4 bps to 2.707% on Friday.

Yields on German 10-year Bunds, which serve as the benchmark for the broader euro zone, were up 1 basis point at 2.51%, while two-year yields were up 1 bp at 2.68%, leaving the gap between the two, or curve, at -16 bps. The German yield curve has been inverted for the better part of a month, as investors have priced in the prospect of the European Central Bank taking a tough line on inflation and raising interest rates quickly to control it.

Euro zone government bond yields fell slightly on Wednesday after jumping on Tuesday as investors braced for further interest rate hikes from the European Central Bank. The yield on Germany's 10-year government bond, which is seen as the benchmark for the euro zone, was down 3 basis points (bps) to 2.479%.

Euro zone government bond yields ticked lower on Wednesday after jumping on Tuesday as investors braced for further interest rate hikes from the European Central Bank, while UK yields rose as traders played catch-up following a long weekend.

Euro zone government bond yields slipped on Wednesday after jumping on Tuesday as investors braced for further interest rate hikes from the European Central Bank. European governments' plans to borrow large amounts through the bond market to support their economies next year have also caused yields to climb. Yet euro zone yields moved lower on Wednesday, giving back some of their recent gains.