US News

Euro zone bond yields hover near recent lows



© Reuters. FILE PHOTO: A Specialist trader watches his chart while working on the floor of the New York Stock Exchange July 8, 2014. REUTERS/Brendan McDermid/File Photo

LONDON (Reuters) – Euro zone government bond yields hovered near recent lows on Wednesday in a quiet start to the European day as traders waited for direction from the U.S. Treasury market and ahead of key jobs data later in the week.

The 10-year German bond yield was down slightly and close to its lowest since February as investors continue to push government borrowing costs down as they bet the European Central Bank (ECB) will keep yields low to support economic recovery from the pandemic.

The German 10-year yield was down 1 basis point at -0.489%. Other core euro zone bond yields were flat or lower by 1 to 2 basis points.

The Italian 10-year yield slipped more than 1 basis point to 0.556%, its lowest level since mid-February.

The 30-year German yield, which sent the whole German yield curve into negative territory on Monday after disappointing U.S. economic data raised new concerns about the strength of recovery, was back below 0% at -0.02%

Citing ECB data released on Monday, analysts have noted that the average maturity of public sector debt the bank holds under its Pandemic Emergency Purchase Programme exceeds that of the universe of eligible bonds for the first time, putting downward pressure on longer-dated yields.

Purchasing managers index survey data for the euro zone in July and published on Wednesday came in slightly worse than expected but did not move as already published flash numbers last month showed significant strength in business activity.

See also  U.K. Poised to Ease Travel Curbs for Fully Vaccinated in August

“The main data highlight today will be July service and composite PMIs from around the world,” Deutsche Bank (DE:) analysts said. “As seen from the manufacturing PMIs and US manufacturing ISM earlier this week, global growth rates continue to look like they may have peaked in Q2 but remain at very robust levels.”

U.S. non-farm payrolls data due on Friday is the more important upcoming data release — traders say euro zone markets may take their next cue from the Treasury bond market and its reaction to the jobs numbers.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply