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.