* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, Nov 29 (Reuters) - Borrowing costs in higher-rated euro zone states such as Germany and France edged up from one-month lows on Friday, ahead of a “flash” reading of inflation for the single currency bloc that could bring some relief to the ECB’s new chief.
Data on Thursday showing annual inflation in Germany — the euro zone’s biggest economy — rose slightly in November point to a moderate uptick in the bloc’s country-wide number, analysts said.
Economists polled by Reuters forecast headline inflation accelerated to 0.9% in November from 0.7% in October.
“These inflation numbers are still well short of the ECB’s mandate of 2%, however they will still be welcomed by a central bank that will shortly see a review into its policy framework, as to how to meet its mandate in the future,” said Michael Hewson, chief market analyst at CMC Markets in London.
The European Central Bank is expected to conduct a strategic review of its policies under Christine Lagarde, who has just taken over the helm of the ECB from Mario Draghi.
In early trade, 10-year bond yields were little changed on the day.
Germany’s benchmark Bund yield was at -0.36%, off one-month lows hit the previous session at around -0.39%.
French and Dutch yields were also off lows hit this week as investors fretted about U.S.-China trade talks.
That broader concern about global trade tensions meant the bloc’s top-rated bond markets were on course to end the week with a third week of yield falls, albeit small ones.
Southern European bond markets, however, looked set to end the week and the month on a weaker footing.
Italian, Spanish and Portuguese debt markets have all sold off heavily this month on renewed political uncertainty in Spain and Italy and as investors booked profit on the hefty price gains made this year in peripheral debt markets.
Italy’s 10-year bond yield, a touch lower on Friday at 1.34%, was poised to end November 32 bps higher. That would mark its biggest monthly jump since August 2018.
Spanish and Portuguese yields are up 17 and 24 bps respectively, set for their largest monthly rise since May 2018 .
Reporting by Dhara Ranasinghe Editing by Shri Navaratnam