Inflation in the 20 countries that use the euro fell to 1.9% in May from 2.2% in April, helping clear the way for more interest rate cuts from the European Central Bank.

The European Central Bank has signalled it is nearing the end of its rate-cutting cycle as it lowered borrowing costs by a quarter point to 2 per cent. The euro climbed to trade 0.5 per cent higher against the dollar at $1.147 after remarks by ECB President Christine Lagarde that the central bank’s easing cycle had “nearly concluded”.

Investors, consumers and policymakers may justifiably fear the specter of tariff-fueled inflation later this year and beyond, but it's powerful global disinflationary forces that are weighing most heavily right now.

Treasury yields climbed Thursday as a selloff in European government bonds overshadowed weakening US labor market data.