Eurozone yields hold steady near recent lows

29 September, 2020 12:00 AM printer

LONDON: Eurozone bond yields held steady in early trading on Monday as investors balanced optimism about signs of a strengthening economic recovery in China with a rising tally of Covid-19 cases that could lead to more lockdown measures.

After rattling around six-week lows for much of last week, German bond yields began this week in a similar fashion, with analysts saying that much of the dovish policy tone heard from European Central Bank (ECB) policymakers already priced in, report agencies.

On Sunday, ECB policymaker Ignazio Visco said a recent strengthening in the euro’s exchange rate was a worry and would warrant a reaction from the central bank if it dragged inflation further away from its goal.

“With souring risk sentiment and recent ECB ‘dovespeak’, EUR rates have already a degree of easing imbedded in them,” ING analysts said in a research note.

Commerzbank analysts said the -0.50 per cent mark had “turned from support to resistance”. Elsewhere Italian bond yields edged slightly lower, with the 10-year at 0.89 per cent, not far from last week’s low of 0.827 per cent, which was an 11-month low.