Well that didn’t last long.

The euro has dropped and investor demand for eurozone bonds has cooled this morning as early inflation figures from the bloc’s largest economy point to price growth falling back from a four-year high this month.

Four German regions have reported their first March estimates for annual inflation today and all four have seen notable drops. The figures have pushed the euro 0.3 per cent lower against the dollar to $1.0734 on the expectation that below target inflation should quell hawks in the European Central Bank.

Consumer price growth in Brandenburg is down to 1.4 per cent to 2 per cent in March and has declined to 1.7 per cent from 2.5 per cent in Hesse and Bavaria.

The numbers will help make up the nationwide figure which is out at 1300 BST. They suggest Germany’s inflation rate will dip from a four-year high of 2.2 per cent in February to around 1.7 per cent this month, according to Jennifer McKeown at Capital Economics.

Higher inflation eats away at fixed asset returns on bonds with government bond yields dipping on the news.

German’s 10-year yield has dipped 1 basis points this morning, with France’s equivalent maturity debt down 1.2bps. Portugal is the biggest rallier, with yields slipping 5 bps.

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