The European Central Bank is increasingly confident that inflation will fall back to its 2% target and this should be reflected in its October policy decision, ECB President Christine Lagarde said on Monday.

The European Central Bank is more confident that inflation is going to settle at its target after a series of recent data releases, and will take that into account when it next sets policy, President Christine Lagarde said Monday.

Christine Lagarde said the European Central Bank is becoming more optimistic that it will be able to get inflation under control, and will reflect on that at its October decision.

Inflation sank across six German states in September — suggesting a slowdown in national data due later in the day that will further fuel calls the European Central Bank to cut interest rates in October.

Euro zone government bond yields edged higher on Monday after German inflation data led investors to slightly scale back their bets on future European Central Bank monetary easing moves. Germany's 10-year bond yield,