New rise of the ten-year Greek bond in the shadow of the ECB decision on interest rates

Eurozone bonds come under strong pressure today after yesterday’s decisions European Central Bank.

In Greek bond market were observed extensive liquidations, which resulted in the yield on the 10-year bond to exceed 4.3%thus returning at the levels of 2019.

At HDAT, transactions of 210 million euros were recorded, of which only 62 million euros related to purchase orders. The yield on the 10-year bond stood at 4.36%, from 3.86% yesterday, compared to 1.42% of the corresponding German bond, with the result that the margin expanded significantly to 2.92%, from 2.51% that closed yesterday.

It is recalled that the Head of the ECB, Christine Lagarde, yesterday left open the possibility of the second consecutive (after July) increase in ECB interest rates in September to be greater than 0.25%. As she explained, whether this increase reaches 0.5% will depend on the medium-term inflation forecast. It is noted that after the on-going revision of the forecasts, the one for 2024, raises the inflation target to 2.1%, ie above the target set by the ECB.

Major investment banks (such as Credit Suisse, Deutsche Bank, Goldman Sachs), assessing yesterday’s ECB announcements in conjunction with current economic developments, predict that in a year from today the key interest rate of the euro will fluctuate. to 2% from 0% today.

However, the international markets after the announcement of inflation in the US, which in May reached the highest levels of the last 40 years, climbing to 8.6%, moving on dry acne. Analysts estimate that the Fed should pursue an even more restrictive monetary policy, raising interest rates by at least 1% over the summer.

In the foreign exchange market, the euro is falling against the dollar as the European currency traded early in the afternoon at $ 1.0511 from the level of $ 1.615 opened by the market. The indicative price for the euro / dollar exchange rate. announced by the ECB reached $ 1.0578