AGL 38.48 Decreased By ▼ -0.08 (-0.21%)
AIRLINK 203.02 Decreased By ▼ -4.75 (-2.29%)
BOP 10.17 Increased By ▲ 0.11 (1.09%)
CNERGY 6.54 Decreased By ▼ -0.54 (-7.63%)
DCL 9.58 Decreased By ▼ -0.41 (-4.1%)
DFML 40.02 Decreased By ▼ -1.12 (-2.72%)
DGKC 98.08 Decreased By ▼ -5.38 (-5.2%)
FCCL 34.96 Decreased By ▼ -1.39 (-3.82%)
FFBL 86.43 Decreased By ▼ -5.16 (-5.63%)
FFL 13.90 Decreased By ▼ -0.70 (-4.79%)
HUBC 131.57 Decreased By ▼ -7.86 (-5.64%)
HUMNL 14.02 Decreased By ▼ -0.08 (-0.57%)
KEL 5.61 Decreased By ▼ -0.36 (-6.03%)
KOSM 7.27 Decreased By ▼ -0.59 (-7.51%)
MLCF 45.59 Decreased By ▼ -1.69 (-3.57%)
NBP 66.38 Decreased By ▼ -7.38 (-10.01%)
OGDC 220.76 Decreased By ▼ -1.90 (-0.85%)
PAEL 38.48 Increased By ▲ 0.37 (0.97%)
PIBTL 8.91 Decreased By ▼ -0.36 (-3.88%)
PPL 197.88 Decreased By ▼ -7.97 (-3.87%)
PRL 39.03 Decreased By ▼ -0.82 (-2.06%)
PTC 25.47 Decreased By ▼ -1.15 (-4.32%)
SEARL 103.05 Decreased By ▼ -7.19 (-6.52%)
TELE 9.02 Decreased By ▼ -0.21 (-2.28%)
TOMCL 36.41 Decreased By ▼ -1.80 (-4.71%)
TPLP 13.75 Decreased By ▼ -0.02 (-0.15%)
TREET 25.12 Decreased By ▼ -1.33 (-5.03%)
TRG 58.04 Decreased By ▼ -2.50 (-4.13%)
UNITY 33.67 Decreased By ▼ -0.47 (-1.38%)
WTL 1.71 Decreased By ▼ -0.17 (-9.04%)
BR100 11,890 Decreased By -408.8 (-3.32%)
BR30 37,357 Decreased By -1520.9 (-3.91%)
KSE100 111,070 Decreased By -3790.4 (-3.3%)
KSE30 34,909 Decreased By -1287 (-3.56%)
Markets

Euro zone bond yields up in wake of U.S. jobs data

  • Lower-rated Southern European bonds underperformed higher-rated peers, with yields rising 3 to 7 basis points. Bond yields move inversely with prices.
Published April 7, 2021

AMSTERDAM: Euro zone bond yields edged up on Tuesday as markets reopened from the Easter holiday and caught up with better-than-expected U.S. employment data released on Friday.

Last week's data showed the U.S. economy created the most jobs in seven months in March, beating expectations, as more Americans got vaccinated and the government doled out additional pandemic relief money.

That pushed safe-haven U.S. Treasury yields higher across the curve on Friday, although they gave up some of those gains on Monday with the downward trend continuing on Tuesday.

On Tuesday, the first day of trading in the euro zone after the Easter holiday, Germany's 10-year yield, the benchmark for the bloc, rose as much as 3 basis points (bps) before paring some gains.

By 1525 GMT it was up nearly 1 bps at -0.317pc.

"Thanks to yesterday's decline in U.S. Treasury yields, any upward pressure on Bund yields stemming from spillover effects is likely to be limited," UniCredit analysts told clients.

Lower-rated Southern European bonds underperformed higher-rated peers, with yields rising 3 to 7 basis points. Bond yields move inversely with prices.

European bond traders closely follow developments in U.S. Treasuries, as bonds in the two regions trade in close correlation.

That caused worries in February, when a sharp rise in Treasury yields on expectations that a vast U.S. stimulus package would reignite growth and inflation also sent euro area borrowing costs higher.

The move was seen as less justified given the bloc's weaker economic outlook coming out of the pandemic.

Euro area data on Tuesday supported sentiment on economic recovery, with an investor morale index rising in April to its highest since August 2018, as investors base their expectations on accelerated vaccination programmes across the European Union.

Unemployment in the bloc was unchanged in February compared to an upwardly revised January reading, as European furlough schemes limited the impact of the second wave of the pandemic on jobs.

The focus this week will be on the European Central Bank, which is expected to release monthly data on its conventional asset purchases and the bi-monthly breakdown of its pandemic emergency bond purchases on Wednesday, followed by the minutes for its March meeting on Thursday.

In the primary market, Italy and Portugal hired syndicates of banks for bond sales that are expected in the "near future", a phrase debt management offices usually use a day before a sale.

Italy will sell a new 50-year bond and re-open a seven-year bond, its Treasury said, while Portugal will sell a 10-year bond, according to a memo seen by Reuters.

Italian 10-year bond yields rose almost 7 bps to 0.700pc, while 10-year Portugues yields were up 3 bps to 0.247pc.

Outstanding bond yields tend to rise ahead of a new sale as investors prepare for the new supply.

Comments

Comments are closed.