MILAN European shares, currencies and bonds rallied on Wednesday after U.S. inflation slowed in June, feeding bets the Federal Reserve is nearing the end of a series of steep interest rate rises.

The U.S. consumer price index rose 3.0% year-on-year last month, scoring its smallest annual increase in more than two years, while excluding food and energy prices it rose 4.8%. Both were below expectations of economists polled by Reuters.

The euro climbed to a fresh high in around 10 weeks and was last up 0.5% at $1.107, while Europe's STOXX 600 equity benchmark index extended gains to rise 1.3%.

Germany's 10-year bond yield, the benchmark for the euro zone, turned lower following the data and was last down 6 basis points at 2.589%.

(This story has been corrected to change the euro level to $1.107, from $1.07, in paragraph 3 )

(Reporting by Danilo Masoni; Editing by Amanda Cooper)