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  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Pre-ECB euro zone yields dip on U.S. tariffs threat

share with twitter share with LinkedIn share with facebook
share via e-mail
0
03/07/2018 | 06:46pm CEST
Presentation of a new 2 Euro commemorative coin in honour of former German Chancellor Helmut Schmidt

LONDON (Reuters) - Euro zone government bond yields fell on Wednesday on concerns that planned U.S. import tariffs including on goods from Europe could impede the European Central Bank's plan to withdraw post-crisis monetary stimulus.

Donald Trump's top economic adviser Gary Cohn, who had told the U.S. president that markets would slump on a tariffs threat, resigned on Tuesday in a move that could ramp up protectionist measures that risk igniting a global trade war.

This fuelled demand for safe-haven government bonds, and U.S. Treasury yields extended overnight falls .

In Europe, demand for government bonds also picked up, a day before a meeting at which policymakers are expected to provide more detail on when the ECB will wind up its massive bond buying scheme.

Analysts said the message could be complicated by U.S. events.

"The fear in the market is that a global trade war could influence economic growth in Europe, and if growth is lower there is more danger of a recession and the ECB might be forced to be slower in reducing accommodation," said DZ Bank analyst Pascal Segesser.

Commerzbank analysts also flagged this possibility in a note, saying Cohn's resignation increased the chance of a more dovish message from the ECB.

Most euro zone government bond yields fell 2-5 basis points, though the yield on Germany's 10-year government bond, the benchmark for the region, rose off session lows of 0.647 percent to trade at 0.65 percent by 1700 GMT - more or less flat on the day <DE10YT=RR>.

Lower-rated southern European debt - seen as more dependent on loose ECB policy - outperformed, with yields falling 3-7 basis points. Portuguese 10-year yields fell to a more than one-month low of 1.837 percent, before inching up to 1.874 percent. <PT10YT=RR> <IT10YT=RR> <ES10YT=RR>

Data showing U.S. private-sector jobs increased by 235,000 in February briefly put some upward pressure on yields, coming before Friday's closely-watched non-farm payrolls report.

The U.S. Federal Reserve's Lael Brainard said she had greater confidence that gradual interest rate increases were needed.

BREATHING ROOM

The Italy-Germany 10-year yield spread tightened further to 140 bps, having narrowed to pre-election levels on Tuesday, as investors appeared to put last weekend's inconclusive vote behind them.

The effect on spreads and on a flat euro <EUR=> was minimal after former prime minister Silvio Berlusconi said in a newspaper interview he would support the leader of the eurosceptic League party in attempts to form a government.

"Spreads more broadly may have some more breathing room as the actual government formation discussions in Italy do not look set to kick off for real until later this month when parliament convenes for the first time," ING strategists said in a note.

(Reporting by Abhinav Ramnarayan; Editing by David Stamp and John Stonestreet)

By Abhinav Ramnarayan

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
09:53aOPEC strives for new deal as Iran still wary of output hike
RE
09:48aECB confident on inflation outlook despite risks - Villeroy
RE
09:40aOil falls as OPEC nears deal to raise production
RE
09:38aMETALLIC COMPONENT PRODUCTION : the importance of cleaning phases
PU
09:38aVICTORIA POLICE : Carelessly cruising on Citylink
PU
09:33aOil falls as OPEC nears deal to raise production
RE
09:28aEU ready to open talks with U.S. to fix trade row - Malmstrom
RE
09:27aSaudi bourse will be ready for inflows after MSCI EM inclusion, stocks rally
RE
09:21aBOJ's Funo says prices are weak, urges bold easing to hit two percent inflation
RE
09:18aTACKLING STUNTING : Rwanda’s Unfinished Business
PU
Latest news "Economy & Forex"
Advertisement