In the eurozone, the head of the ECB, Christine Lagarde, appeared reassuring, stating that pressures on the banks are visible, but it is possible that these will develop into a banking crisis
With the eyes on the other side of the Atlantic, awaiting the “verdict” of the Fed on interest rates, the bond markets moved today on Wednesday. Prices eased slightly resulting in higher yields across all durations.
In the eurozone, the head of the ECB Christine Lagarde appeared reassuring, stating that pressures on the banks are visible, however it is possible that these will develop into a banking crisis in the shadow of the Credit Suisse case.
However, given this turmoil, investors doubt whether the ECB will be able to continue raising interest rates to fight inflation.
For his part, the chief economist of the ECB Philip Lane stated that this turmoil may prove to be a “non-event” for monetary policy.
In the secondary market, in the Electronic Transaction System (HDAT) the volume of transactions was 82 million euros, of which 36 million euros were purchase orders. The yield on the benchmark 10-year bond stood at 4.24% from 4.19% yesterday versus 2.32% for the corresponding German bond, bringing the spread to 1.92% from yesterday’s close of 2.09%.
In the foreign exchange market, the euro is moving higher against the dollar today as the European currency was trading at $1.0794 in the early afternoon from the level of $1.0758 that opened the market.
The indicative euro/dollar exchange rate announced by the ECB was set at $1.0787
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