The 10-year U.S. Treasury yield fell 1.4 basis points to 4.680% after July inflation eased in line with forecasts, reducing the likelihood of a Federal Reserve rate increase next month, while strong demand at a 10-year Treasury auction also supported the market. In the eurozone, the 10-year Bund yield rose 0.5 basis points to 3.162% as hopes for a U.S.-Iran peace deal faded, prompting concern that a prolonged Middle East conflict could disrupt supply chains and add to inflation pressure. Investors were also watching U.S. PPI (producer price index) data at 1230 GMT, which Commerzbank said could further strengthen the case for the Fed to stay put if the reading is benign.