Germany’s 10-year Bund yield dipped below 2.8%, its lowest level since early December, as a run of weaker-than-expected economic data dampened expectations of an ECB rate hike by year-end. EUROSTAT data showed Eurozone consumer price inflation eased to a four-month low of 2% in December, returning to the ECB’s midpoint target. Core inflation, which excludes energy, food, alcohol, and tobacco, fell to 2.3%, slightly below forecasts of 2.4%. In Germany, annual inflation slowed to 1.8% in December, missing expectations and falling below the ECB’s 2% target for the first time since September 2024. Economic momentum in Germany also showed signs of weakening, with retail sales declining 0.6% in November, the steepest drop since May, versus forecasts for a 0.2% rise. As a result, money markets are now pricing in an almost zero probability of an ECB rate hike by December 2026.