The ‘Omicron’ embankment in the rise of bond yields

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The resurgence of inflation is leading bond yields to new highs. In Germany, the yield on the 10-year bond, which is generally considered to be the most stress-resistant, is “going” to “absolute zero”. In other words, at the levels that were traded in 2019. The markets, after the inflation jump to 5%, are currently pricing an increase in interest rates by 0.15% until the end of 2022, despite the assurances to the contrary from the European Central Bank.

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Economic analysts estimate that the rise in yields on all eurozone bonds would be even greater if the market did not have the climate of insecurity caused by the rapid spread of the “Omicron” mutation. The “window” of opportunity created by the uncertainty of the pandemic was hurried to be exploited by Spain today, announcing the first consortium issue of a 10-year bond. The country is estimated to borrow at least 75 billion euros from the markets this year.

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In the domestic market and more specifically, in the Electronic Trading System of the Bank of Greece (HDAT) today were recorded transactions of 124 million euros, of which 56 million euros related to purchase orders. The yield on the 10-year benchmark bond stood at 1.55% from 1.52% closed on Friday, compared to -0.03% of the corresponding German bond, resulting in a margin of 1.58% from 1.56%.

The euro is declining in the foreign exchange market today as it traded early in the afternoon at $ 1.1326 from the $ 1.1359 that the market opened.

The indicative price for the euro / dollar exchange rate announced by the European Central Bank was set at $ 1.1318.



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