The yield on the German 10-year Bund was above the 2.7% threshold, halting the pullback from the two previous sessions as signs of traction in inflation backed the view that the ECB is done with its easing policy cycle. Both the national and EU-harmonized domestic headline inflation rose to 2.4% in September, firmly above estimates. Price growth also picked up in France and Spain, albeit less than expected, while inflation was steady in Italy. The results consolidated expectations that ECB policymakers will hold interest rates unchanged in the near future to prevent a rebound in price growth, as leading indicators in PMI reflected a strengthening services sector and allowed for some respite in expansionary policy. In the meantime, the reintroduction of deficit spending in Germany lifted the yield on the 10-year Bund to a 35bps gain year-to-date, while its spread with the Italian BTP hovered at its lowest level since 2010.