Euro zone bond yields edge up, snapping 4-day falling streak
Euro zone government bond yields edged up on Wednesday, snapping a four-day falling streak as investors await developments on the tariff front, which could affect the economic outlook.
U.S. President Donald Trump on Tuesday said the EU's move to set up talks was positive and that he hoped Europe would "open up" to trade with the U.S. even as he reiterated his threat to impose trade terms if no agreement emerges.
Meanwhile, super-long-dated Japanese government bond yields jumped after a sharp decline in the previous three sessions on expectations that the Ministry of Finance was considering cutting super-long bond issuance to ease market pressure.
Germany's 10-year government bond yield, the euro area benchmark, was up 2 basis points (bps) at 2.55% after hitting 2.513% on Monday, its lowest level since May 8.
U.S. stock index futures slipped on Wednesday after a sharp rally in the previous session, when easing tariff tensions boosted sentiment.
Some market participants expect the European Central Bank to ease its monetary policy if U.S. tariffs prompt a sharp economic slowdown in the euro area to prevent inflation from undershooting the ECB's target.
Markets price in a 90% chance of an ECB 25 bps rate cut next week. They also indicated a deposit facility rate at 1.70% in December, from 1.55% in mid-April after the ECB policy meeting.
ECB Chief Economist Philip Lane said that while most factors pointed to euro area inflation continuing to fall, there were others, including the risk of EU-U.S. trade talks failing, that could drive inflation up.
The number of people out of work in Germany rose at a faster pace than expected in May.
"Looking ahead, there are tentative signs of a bottoming out of the labour market," said Carsten Brzeski, global head of macro at ING.
"At the same time, ongoing announcements of potential cost-cutting measures in the automotive and other industries and the continuing increase in the number of bankruptcies are a strong warning against premature celebration."
Benchmark 10-year U.S. Treasury yield was up 4 bps in London trade after declining 7.5 bps on Tuesday.
Italy's 10-year yield rose 2 bps to 3.55%.
The gap between Italian and German yields stood at 97 bps, after reaching 90.90 bps last week, its lowest level since March 2021.
According to Barclays, which has lowered its target range for the Italian-German yield gap to 70-120 bps from 90-140 bps, the recent tightening "reflects the dissolution of the distinctions between core-periphery euro area government bonds."
(Reporting by Stefano Rebaudo, editing by Ros Russell)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
25 minutes ago
- Zawya
US job openings rebound in April; layoffs pick up
U.S. job openings increased in April, but layoffs picked up in a move consistent with a slowing labor market amid a dimming economic outlook because of tariffs. Job openings, a measure of labor demand, rose 191,000 to 7.391 million by the last day of April, the Labor Department's Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Data for March was revised higher to 7.200 million open positions instead of the previously reported 7.192 million. Economists polled by Reuters had forecast 7.10 million vacancies. April's rise in vacancies was likely a correction following March's sharp decline. Hiring increased by 169,000 to 5.573 million in April. Layoffs rose 196,000 to 1.786 million. Economists say the on-gain, off-again manner in which the import duties are being implemented is making it difficult for businesses to plan ahead. A U.S. trade court last week blocked most of President Donald Trump's tariffs from going into effect, ruling that the president overstepped his authority. But the tariffs were temporarily reinstated by a federal appeals court on Thursday, adding to the uncertainty facing businesses. Consumers are increasingly becoming less confident about the jobs market and the Conference Board's labor market differential has narrowed considerably this year. That could be reinforced by May's employment report, which is scheduled for release on Friday. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast to hold steady at 4.2%, with greater risks of a rise to 4.3%. (Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)
Zawya
an hour ago
- Zawya
Ghana, Japan Sign ¥402 Million Grant Agreement to Boost Human Capital Development
The Government of Ghana and the Government of Japan have signed a grant agreement valued at ¥402 million under the Japanese Grant Aid for the Human Resource Development Scholarship (JDS) Programme. The signing ceremony, held at the Ministry of Finance in Accra, marks the launch of the third batch of the fourth phase of the programme. Speaking at the event, Finance Minister Dr. Cassiel Ato Forson expressed Ghana's appreciation to the Government and People of Japan for their consistent support. He noted that the programme aligns with Ghana's ongoing efforts to strengthen institutional capacity and build a resilient, knowledge-driven public sector. Dr. Forson also provided updates on Ghana's economic outlook. He stated that Ghana's sovereign credit ratings are expected to improve soon, reflecting the country's progress toward economic recovery. Executive Senior Vice President of the Japan International Cooperation Agency (JICA), Miyazaki Katsura who led the Japanese delegation, acknowledged Ghana's request and reaffirmed Japan's commitment to long-term development cooperation. She emphasised the strategic importance of the JDS Programme in preparing Ghanaian professionals for leadership and institutional reform. The ceremony concluded with the signing of the grant agreement, reinforcing the strong bilateral partnership between Ghana and Japan and paving the way for expanded cooperation in both human capital and infrastructure development. Distributed by APO Group on behalf of Ministry of Finance - Republic of Ghana. Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an 'as is' and 'as available' basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release. The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk. To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
Zawya
2 hours ago
- Zawya
Trump tariffs stoke supply chain worries for US businesses, survey shows
A majority of U.S. business owners are worried about supply chain disruptions from President Donald Trump's sweeping tariffs, a survey by insurance brokerage Gallagher showed on Tuesday. WHY IT'S IMPORTANT The findings come as Trump's tariff policies raise fears of renewed trade friction, posing risks of strained operations, higher costs and disrupted sourcing strategies for U.S. businesses across sectors. The trade war has already cost companies more than $34 billion in lost sales and higher costs, a Reuters analysis of corporate disclosures, showed last week. KEY QUOTES "Our survey showed supply chain disruptions were a concern to business owners, with 90% reporting they are concerned about the impact of tariffs on their businesses," Chairman and CEO J. Patrick Gallagher told Reuters. "Global supply chains, strained by geopolitical conflicts and extreme weather events, remain vulnerable to disruptions," he said, adding that owners are taking steps to ensure they are diversified and protected from potential impacts. BY THE NUMBERS In a survey of 1,000 U.S. business owners, 72% said they are very concerned about cyber attacks over the next 12 months, while 69% cited supply chain disruptions and severe weather as top risks. On top of that, nearly all U.S. business owners said they are at least somewhat concerned about the impact of AI on their business over the next 12 months, up from 85% a year earlier. Among U.S. business owners with insurance coverage, nearly 87% made a claim in 2024. For most, each of those claims was $25,000 or more, but only some of those claims were covered by various policies, the Gallagher survey showed. CONTEXT Supply chain stability is critical for businesses to manage costs, meet customer demand on time, and maintain smooth operations without unexpected delays or inventory shortfalls. The backdrop of geopolitical tensions, climate-related disruptions, and rising cybersecurity threats has added to the uncertainty facing U.S. companies. (Reporting by Manya Saini in Bengaluru; Editing by Shounak Dasgupta)
