All Eurozone bond markets are moving higher today as fresh turmoil centered around Deutsche Bank turns investors to the safety of government bonds.

In this climate and despite the pressures exerted within the European Central Bank to continue at the same pace the increase in interest rates, bond yields fell.

In the Greek market the yield on the 10-year bond hovers just above 4%, while the spread against the corresponding German bond fell below 2%.

However, today’s statements by the president of the Central Bank of Germany, the Bundesbank, Joachim Nagel, who argued that the European Central Bank must continue to raise interest rates to fight inflation, are indicative of the pressures exerted within the ECB. He argued that wage developments are likely to prolong the prevailing period of high inflation rates. “In other words: inflation will become more persistent,” he said.

In the secondary market, in the Electronic Transaction System (HDAT) the volume of transactions was 64 million euros, of which 14 million euros related to purchase orders. The yield on the benchmark 10-year bond stood at 4.06% from 4.24% versus 2.10% for the corresponding German bond, bringing the spread to 1.96%.

In the foreign exchange market, the euro is falling against the dollar today as the European currency was trading at $1.0762 in the early afternoon from the level of $1.0787 that opened the market.

The indicative euro/dollar exchange rate announced by the ECB was set at $1.0745.