ECB Vice President de Guindos tried to calm markets, reminding that the next rate hikes will depend on macroeconomic data.
Strong pressures are exerted on the bond market, resulting in the Greek 10-year yield “returning to the levels of 2017-18” (4.54%).
The sentiment is negative across all European bonds, as investors expect significant interest rate hikes following last week’s unfavorable data on the inflation front.
ECB vice-president de Guindos attempted to calm markets by reminding that the next rate hikes will depend on macroeconomic data.
Nevertheless, “on the other side» the Bank of International Settlements (Bank of International Settlements), which is based in Basel, called on the Central Banks to proceed dynamically in their interest rate increases, ignoring the negative consequences that this will bring about on the development front.
In its quarterly Report the Swiss-based BIS recognized that both recession and debt risks are rising, but argues that reducing rising global inflation remains paramount.
It is recalled that analysts expect within the week the Federal Central Bank of the USA (FED) to proceed with another increase in its interest rates. This development is expected to lead to a further strengthening of the dollar’s exchange rate, thus causing even stronger inflationary pressures in the eurozone economies. Since the beginning of the year, the euro has slipped about 12% against the US dollar.
In the HDAT, transactions of 108 million euros were recorded, of which 42 million euros related to purchase orders. The yield on the 10-year bond rose to 4.51% from 4.32% that closed on Friday, versus 1.80% for the corresponding German security, bringing the spread to 2.74% from 2.56% that closed at the end of previous week.
In the foreign exchange market, the dollar strengthened against the euro with the European currency trading at $0.9994 in the early afternoon from $1.001 at the market open.
The indicative price for the euro/dollar exchange rate announced by the ECB was set at $0.9990.
RES-EMP
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I have worked in the news industry for over 10 years and have been an author at News Bulletin 247 for the past 5 years. I mostly cover technology news and enjoy writing about the latest gadgets and devices. I am also a huge fan of music and enjoy attending live concerts whenever possible.
