Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Interest Rates

News : Interest Rates

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 

German bond yields hit near 3-week low as ECB signals 'lower for longer' stance

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/13/2017 | 05:20pm CEST
The German share price index, DAX board, is seen at the stock exchange in Frankfurt

LONDON (Reuters) - German bond yields fell to their lowest level in almost three weeks on Friday after a Reuters report that European Central Bank policymakers had broadly agreed to extend their bond-buying scheme into next year while scaling it back.

Disappointing U.S. inflation data sparked further price gains in the afternoon session, pushing yields across the bloc to fresh lows.

But the primary focus in Europe remained on the ECB.

ECB ratesetters are moving towards announcing more asset purchases at lower volumes at their October policy meeting, with views converging on a further nine months, five people with direct knowledge of the discussion told Reuters.

The consensus among analysts and economists has been for the ECB to extend the 2.3-trillion-euro scheme into 2018, but with little clarity on the duration.

Nine months would be at the higher end of expectations.

"Most forecasts were for an extension of between six to nine months but it makes sense to keep the purchases in place for as long as possible to help reduce market volatility and reinforce the rates guidance," ING strategist Benjamin Schroeder said.

Germany's 10-year government bond yield fell more than 3 basis points to as low as 0.40 percent <DE10YT=TWEB>.

It was set to end the week 4 bps lower, on track for its biggest one-week fall since early September.

ECB President Mario Draghi late on Thursday defended a promise to keep interest rates at rock bottom, batting back German calls for a speedy exit from years of easy money.

"A gradual approach to tapering, without a long, pre-committed period through which the purchases are intended to continue, allows for a re-evaluation and another recalibration a few months later, depending on the markets' initial reaction," Rabobank said in a note.

Most euro zone bond yields were 3-6 bps lower on the day.

They extended falls on data showing U.S. consumer prices recorded their biggest increase in eight months in September as gasoline prices soared in the wake of hurricane-related production disruptions, but underlying inflation remained muted.

"It is the inflation story that matters right now, it doesn't matter how strong growth is if there's no life in the price data," said Chris Scicluna, head of economic research at Daiwa Capital Markets.

Elsewhere, there was a slight underperformance of Austrian government bond yields, down 3 bps at 0.60 percent, ahead of national elections on Sunday.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

(Reporting by Abhinav Ramnarayan and Dhara Ranasinghe; Editing by Robin Pomeroy)

By Abhinav Ramnarayan and Dhara Ranasinghe

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Interest Rates"
07/13German, Belgian and French bond yields hit fresh lows as safety bid expands
RE
07/13Federal Reserve Report Defends Use of New Tools to Set Interest Rates
DJ
07/13Bank of England's Cunliffe sees case for 'stodginess' in setting interest rates
RE
07/13Chinese hotel denies raising rates for Americans amid trade war
RE
07/12Investors Bet on Higher Rates as U.S. Inflation Firms
DJ
07/12Euro zone bond yields fall after dovish ECB minutes, German curve flattens
RE
07/12Investors Bet on Higher Rates as U.S. Inflation Firms
DJ
07/12ECB sees rates at record low levels for as long as needed - minutes
RE
07/11Euro zone bond yields fall as U.S. raises stakes in China trade row
RE
07/10Italy's bond yields pushed up by eurosceptic's remarks
RE
Latest news "Interest Rates"
Advertisement