German Bond Yields Fall from 14Month High ahead of U.S. CPI

0
47
18237500 - businessman hand pointing to investment as concept

May 12 Reuters German bond yields fell from their highest in over a year as stock markets steadied on Wednesday and the market awaited U.S. inflation data due later in the session.

Global financial markets have had a turbulent week. Equities have slumped and bond yields, particularly in the euro area, have risen sharply as investors grew nervous about growing inflationary pressure and stretched market valuations.

That sent market expectations of longterm euro zone inflation to its highest since 2018 on Tuesday.

This weeks focus is the U.S. April inflation reading due at 1230 GMT. Investors will assess the chance of any change of stance from the Federal Reserve, which says nearterm inflation is transitory.

On Wednesday, Germanys 10year yield, the benchmark for the region, was down 1 basis point to 0.17 by 1020 GMT, after rising to the highest since March 2020 at 0.152 on Tuesday.

Thirtyyear yields also fell to 0.40, after touching their highest since May 2019 at 0.421, when they came under specific pressure from a 30year syndicated green bond sale on Tuesday.

Italian bond yields were down 1 bp to 0.93, below the highest since September 2020 touched on Tuesday.

Todays U.S. CPI release should do little to calm things down, Christoph Rieger, head of rates and credit research at Commerzbank told clients.

U.S. and euro area bond yields are closely correlated.

Besides inflation indications, central bank guidance should thus remain key, Rieger added, referring in…

LEAVE A REPLY

Please enter your comment!
Please enter your name here