Bond prices are under pressure today, despite the encouraging publication of the Financial Times, which refers to the intention of the European Central Bank to implement a new bond market program for the weakest countries.
According to the report, at this week’s meeting of the Governing Council of the ECB in Amsterdam, central bankers are expected to support a proposal to set up a new bond-buying program if needed to address borrowing costs for Member States. According to the British financial newspaper, the ECB has an additional 200 billion euros to spend on the debt market of the eurozone member states under pressure under the current bond purchase program. This € 200 billion will come from promoting asset reinvestments that expire in up to a year.
However, the expectation of a new ECB intervention does not prove to be able to offset the forthcoming interest rate hikes.
PIMCO – one of the largest bond managers in the world – in its analysis today estimates that the ECB within the year will increase its core interest rate by 1.20%.
Regarding the domestic bond market, extensive liquidations were observed, which resulted in falling prices.
In HDAT, transactions of 228 million euros were recorded, of which only 66 million euros related to purchase orders. The yield on the 10-year bond stood at 3.84% compared to 1.29% of the corresponding German bond, resulting in a margin of 2.55%.
In the foreign exchange market, the euro is moving slightly higher against the dollar as the European currency traded early in the afternoon at $ 1.0722 from the level of 1.0712 dollars that opened the market.
The indicative price for the euro / dollar exchange rate. announced by the ECB reached $ 1.0726.
Source: Capital
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