DAX Holds Steady As Inflation Fears Ease

German stocks were flat to slightly higher on Friday as U.S. inflation fears receded and investors bet that any shift in ultra-accommodative policy is unlikely to happen soon.

Overnight data showed that U.S. consumer prices rose 5 percent in May, the biggest annual since 2008 and more than economists had expected.

But the data reinforced hopes that rising price pressures will be transitory and the central bank is unlikely to withdraw monetary support any time soon.

Investors await the Federal Reserve's monetary policy meeting next week for more clues about the state of the economy and policy outlook.

U.S. treasury yields fell, with the benchmark yield on 10-year note touching 1.43 percent after the release of U.S. inflation data.

The benchmark DAX was up 8 points at 15,579 after closing 0.1 percent lower on Thursday.

Banks were coming under selling pressure, with both Commerzbank and Deutsche Bank tumbling around 3 percent as Euro zone government bond yields fell after a dovish outcome to Thursday's ECB meeting.

After maintaining an elevated pace of pandemic emergency bond purchases (PEPP) for the third quarter, the European Central Bank said that inflation would remain below the central bank's target of just under 2 percent through 2023.

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