Euro zone bond yields edge up on positive PMI surprises
- French business activity unexpectedly also almost returned to growth this month as some coronavirus restrictions were eased and the manufacturing sector saw a minor rebound.
AMSTERDAM: Euro zone bond yields rose in early trade on Wednesday as data pointed to better-than-expected business activity in the bloc this month.
Germany's private sector showed resilience in December as manufacturing picked up steam and the services sector showed a surprise partial recovery ahead of a stricter lockdown, Markit's preliminary purchasing managers' index indicated.
French business activity unexpectedly also almost returned to growth this month as some coronavirus restrictions were eased and the manufacturing sector saw a minor rebound.
Euro zone figures are due at 0900 GMT, with a Reuters poll expecting a small improvement in the overall figure spanning services and manufacturing, although manufacturing growth is expected to slow slightly.
"Resilient data will be cold comfort though, with hard lockdowns taking effect," Commerzbank rates strategist Rainer Guntermann told clients.
Headlines suggesting progress on a Brexit deal were likely to be modestly supporting borrowing costs.
Germany's 10-year bond yield was up as much as 2 basis points to -0.589pc in early trade, its highest in nearly a week. French 10-year yields rose similarly.
Italy's 10-year bond yield was unchanged at 0.49pc, after hitting a record low at 0.48pc on Tuesday.
In the primary market, Italy will conduct a buyback of five bonds due in 2021.
Later in the session investors will also focus on the outcome of the U.S. Federal Reserve meeting.
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