Pressure on bonds after ECB rate hike

The government bonds of the hard core of the eurozone came under pressure from yesterday’s decision of the European Central Bank to increase its interest rates by 0.75%.

On the contrary, Greek and Italian bonds proved to be more resistant, with the result that no significant increases in their yields were observed.

The already negative climate was burdened by an article in the Financial Times according to which the ECB will start from next month to limit the size of its assets. Such a development in practice will lead to an even more restrictive monetary policy, significantly limiting the liquidity circulating in the market, a large part of which is directed to the markets.

It is recalled that in recent years the ECB created a bond portfolio of 5 trillion. euros, channeling an equal amount of liquidity to the economies of the eurozone countries. The relevant decision is expected to be taken by the end of the year, when the Central Bank of the Eurozone will gradually stop replacing expiring bonds with new ones, thus forcing the member states to proceed with their repayment. As far as each country is concerned, the ECB has bought Greek bonds worth around 39.8 billion euros as part of the PEP pandemic program.

In HDAT, transactions of 154 million euros were recorded, of which 82 million euros related to purchase orders. The yield on the 10-year bond stood at 4.23% from 4.21% yesterday versus 1.70% for the German counterpart, bringing the spread to 2.56% from 2.66% yesterday.

In the foreign exchange market, the euro is strengthening against the dollar with the European currency trading at $1.0050 in the early afternoon from $0.994 when the market opened. The indicative price for the euro/dollar exchange rate announced by the ECB was 1.0049 dollars.

RES-EMP

Read the News today and get the latest news.
Follow Skai.gr on Google News and be the first to know all the news.