Yesyields increase by 1 to 2 basis points
De Guindos says he could raise macroeconomic projections
Markets calm ahead of annual Fed symposium
Adds details after official ECB comments, latest prices
LONDON, August 25 (Reuters) – Eurozone government bond yields rose on Wednesday, hitting an overnight high after a European Central Bank official said the bank may revise its macroeconomic projections for the eurozone upward in September after recent strong activity indicators.
Comments from ECB Vice President Luis de Guindos pushed yields higher on an otherwise calm day. Investors are largely holding back the big bets ahead of the US Federal Reserve’s annual symposium on Friday.
After falling last week, yields rallied slightly as investors calmed down in the face of a possible pullback in Federal Reserve stimulus and a slowing economic recovery.
Around 10:00 GMT, the German 10-year benchmark yield was up 2 basis points to -0.463% DE10YT = RR, after climbing to -0.472%, while other core yields rose by a similar amount, with the French 10-year rate FR10YT = RR reaching its highest level since August 13.
Earlier this month, the German 10-year rate hit -0.524%, its lowest since early February. While Fed officials have made noise about starting to cut asset purchases, the ECB has pledged to stick to its stimulus measures for now.
Peripheral bond yields also rose, although mostly by less than 1 basis point ES10YT = RR.
Wednesday is light on the data. Germany’s Ifo business climate index for August is slightly lower than expected, as morale fell for the second month in a row in August due to supply bottlenecks and increased COVID-19 cases , but the market has changed little.
ING analysts said bond yields looked set to rise as concerns about the Delta COVID-19 variant faded.
“In recent months, it has not been easy to point to macro releases and use them to position themselves on higher market rates. But at the same time, it seems that the momentum of declining market rates is sinking. ‘is slowed down somewhat, ”ING analysts said.
“The narrative of the data impacted by Delta is there, but beyond that is the realization that over the coming months, the vast majority of populations in developed markets (particularly the United States and the United States) ‘Europe) will have been vaccinated or contracted Delta. “
U.S. Treasury yields edged higher as investors waited for a speech on Friday in which Federal Reserve Chairman Jerome Powell could give hints as to when the U.S. central bank is likely to start cutting bond purchases .
10-year benchmark returns US10YT = RR rose 1 basis point to 1.295% after briefly hitting 1.3%, the highest since August 13.
(Reporting by Tommy Wilkes; Editing by Andrew Heavens and David Holmes)
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