Latest news with #GermanBunds
Business Recorder
27-05-2025
- Business
- Business Recorder
Euro zone yields edge down as tariff-turbulence ebbs
LONDON: Euro zone government bond yields dipped on Tuesday, ahead of a raft of regional inflation readings this week and as investors digested the latest reversal in US tariff policy towards the European Union. The yield on 10-year German Bunds, which serve as a benchmark for the wider euro zone market, was down 1.1 basis point at 2.55% while that on 30-year debt eased 1.7 bps to 3.062%, although the drops lagged the declines seen in long-dated Japanese and US bond yields. With inflation numbers on both sides of the Atlantic due this week, there could be room for another price rally, according to Commerzbank head of rates Christoph Rieger. 'Further bullish hopes are pinned on this week's inflation figures, but the first leads from France today may not fulfil these expectations,' Rieger said. 'In contrast to the pending German and euro zone numbers, our economists expect a small increase in the headline rate, which could be above consensus. With lower German numbers still expected by the end of the week, which could take the headline rate back to 2%, we suggest buying into potential dips at 10y Bund yields around 2.6%,' he said. Yields on the two-year Schatz were fairly flat on the day at 1.794%. Last week, two-year yields touched their lowest in nearly a month, as investors showed a preference for non-US debt, given the unpredictability of US tariff policies and the growing concern over the long-term finances of the US government. Euro zone yields nudge higher, long-dated bonds under pressure Two-year yields are typically more reactive to shifts in expectations for European Central Bank monetary policy, yet much of the focus lately has been on trade uncertainty and government finances. Elsewhere, yields on 10-year Italian, French and Spanish bonds edged lower by around 1-2 bps, reflecting a relative sense of stability to trading on Tuesday.
Mint
27-05-2025
- Business
- Mint
Euro zone yields edge down as tariff-turbulence ebbs
LONDON, May 27 (Reuters) - Euro zone government bond yields dipped on Tuesday, ahead of a raft of regional inflation readings this week and as investors digested the latest reversal in U.S. tariff policy towards the European Union. The yield on 10-year German Bunds, which serve as a benchmark for the wider euro zone market, was down 1.1 basis point at 2.55% while that on 30-year debt eased 1.7 bps to 3.062%, although the drops lagged the declines seen in long-dated Japanese and U.S. bond yields. With inflation numbers on both sides of the Atlantic due this week, there could be room for another price rally, according to Commerzbank head of rates Christoph Rieger. "Further bullish hopes are pinned on this week's inflation figures, but the first leads from France today may not fulfil these expectations," Rieger said. "In contrast to the pending German and euro zone numbers, our economists expect a small increase in the headline rate, which could be above consensus. With lower German numbers still expected by the end of the week, which could take the headline rate back to 2%, we suggest buying into potential dips at 10y Bund yields around 2.6%," he said. Yields on the two-year Schatz were fairly flat on the day at 1.794%. Last week, two-year yields touched their lowest in nearly a month, as investors showed a preference for non-U.S. debt, given the unpredictability of U.S. tariff policies and the growing concern over the long-term finances of the U.S. government. Two-year yields are typically more reactive to shifts in expectations for European Central Bank monetary policy, yet much of the focus lately has been on trade uncertainty and government finances. Elsewhere, yields on 10-year Italian, French and Spanish bonds edged lower by around 1-2 bps, reflecting a relative sense of stability to trading on Tuesday. (Reporting by Amanda Cooper and Dhara Ranasinghe; Editing by Kirsten Donovan)
Wall Street Journal
25-04-2025
- Business
- Wall Street Journal
Eurozone Medium-, Long-Term Rates Seen Relatively Unchanged
0604 GMT – Danske Bank Research expects relatively unchanged medium- and long-term rates in the eurozone, but potentially with quite large fluctuations, says Frederik Romedahl in a note. Fluctuations should be subject to political noise and uncertainty related to the economic consequences of the tariff policy, the chief analyst says. Interest-rate cuts by the European Central Bank point to lower yields at the short end of the curve, while long-term government bond yields face the greatest upward risk, he says. At the long end of the curve, 'the term premium, more than for swap rates, is sensitive to military build-up in Europe and the significant debt financing the process will require.' ( 0554 GMT – Societe Generale Research is cautious about French government bonds, or OATs, amid political stress and fiscal uncertainty, says strategist Mathias Kpade in a note. 'Political risk and fiscal fragility persist,' he says. 'French politics remain stressed, with no clear fiscal path.' Societe Generale Research, therefore, recommends investors short OATs if the yield spread between 10-year OATs and German Bunds falls below 70 basis points. The 10-year OAT-Bund yield spread closed at 72 basis points on Thursday, according to Tradeweb. (
Wall Street Journal
23-04-2025
- Business
- Wall Street Journal
U.S. 10-Year Treasury Yields Likely to Stay in 3.5%-5.0% Range
1023 GMT – U.S. 10-year Treasury yields are likely to remain within a range between 3.5% to 5%, says Allspring Global Investments' Noah Wise. The Trump administration's policy changes have caused volatility in Treasurys but the risks remain balanced, with potential for yields to rise or fall, the senior portfolio manager says. He doesn't expect a significant shift in the yield range. Yields dipping below 3.5% would likely signal a recessionary environment, while yields climbing above 5.0% would suggest a scenario where inflation expectations are structurally higher, he says. The 10-year Treasury yield falls 6 basis points to 4.332%, according to Tradeweb. ( 0907 GMT – Eurozone government bonds have the potential to benefit from investors' loss of confidence in U.S. assets, says MUFG's Derek Halpenny in a note. German Bunds have been outperforming U.S. Treasurys while the French OAT-German Bund yield spread has been relatively stable, the head of research says. Data from Japan's ministry of finance for February confirm this. Combined purchases of bonds from Germany, France, Italy and Spain—the eurozone's four largest sovereign issuers—reached the highest level since March 2019, he says. Purchases from these countries amounted to 1,604 billion yen, of which the buying of French bonds amounted to 618 billion yen, the highest since June 2019, he says. (
Gulf Today
22-04-2025
- Business
- Gulf Today
Eurozone inflation to stabilise at the 2 per cent target of ECB
Eurozone inflation could be a touch higher this year than earlier thought but will then stabilise at the European Central Bank's 2 per cent target, the bank's Survey of Professional Forecasters showed on Tuesday. The ECB cut interest rates for the seventh time in a year on Thursday, arguing that disinflation was well on track and risks were on the rise that price growth comes even lower than earlier thought. The ECB's survey, often a key input into policy deliberations, showed 2025 inflation averaging 2.2 per cent, above the 2.1 per cent predicted three months ago while the 2026 number was lifted to 2.0 per cent from 1.9 per cent. However, these numbers may be less significant than in the past since the ECB's cut off for collecting projections was April 4 and financial markets have shifted significantly since then due to the US's erratic trade policy. The euro has firmed sharply against the dollar and energy prices have fallen, changes that could significantly slow inflation. Trade barriers and tensions with the US could also sharply slow economic growth and weigh on prices. The survey, however, only showed a small revision in the growth outlook, putting the 2025 expansion at 0.9 per cent versus the previous 1.0 per cent number, suggesting that not all of the trade tension is yet factored in. ECB President Christine Lagarde earlier argued that a full trade war could deduct up to 0.5 percentage point of growth. Eurozone government bond yields steadied on Tuesday as traders returning from the long weekend reassessed their outlook for the economy after the European Central Bank's rate decision on Thursday and comments that US tariffs would knock growth. Investors were also digesting US President Donald Trump's Monday warning that domestic growth could slow unless the Federal Reserve cut interest rates immediately, which triggered a sell-off in long-dated Treasuries. German 10-year bond yields, the benchmark for the Eurozone bloc, inched up 0.5 basis points to 2.47 per cent. Italy's 10-year yield was 1.4 basis points higher at 3.66 per cent. Trump repeated his criticism of Fed Chair Jerome Powell, who says rates should not be lowered until it is clearer Trump's tariff plans won't lead to a persistent surge in inflation. The spread between US 10-year Treasuries and German Bunds widened to 195 bps. The premium investors demand to hold US debt rather than German has increased by 48 basis points so far in April, heading for its biggest monthly rise since June 2003, according to LSEG data. Germany's two-year bond yield, which is more sensitive to ECB rate expectations, extended its slide on Tuesday, falling by 2.9 bps to 1.64 per cent. It dropped about 7 bps on Thursday after investors priced in more rate cuts by the ECB after the central bank lowered interest rates to 2.25 per cent last week.
