Bond yields closed higher this week. Executives of the ECB with their statements in the previous days, indirectly but clearly tried to moderate the expectations for when the interest rate reduction cycle will start.

The ECB’s chief economist Philip Lane pointed out that the European Central Bank still needs more evidence that inflation is returning to its 2% target before cutting interest rates.

Adding that the new evidence suggests that the deflationary process in the short term may actually develop faster than previously expected

ECB Governing Council member Isabel Schnabe said, for example, that the European Central Bank should be patient with rate cuts as inflation could reignite and recent data confirmed fears that the “last mile” to cut of, will be the most difficult.

Schnabel warned against the ECB cutting interest rates too soon, arguing that previous rate hikes have already peaked and some worrying signs remain as a new, “critical” phase of deflation begins.

The ECB has held interest rates steady at a record high since September, but slowing growth and easing price pressures are fueling talk of a rate cut with investors expecting the first move in April or June.

In the Electronic Transaction System of the Bank of Greece (HDAT) transactions of 142 million euros were recorded, of which 110 million euros related to purchase orders. The yield on the benchmark 10-year bond rose to 3.49% from 3.47% that closed yesterday, versus 2.37% for the corresponding German bond, bringing the spread to 1.12%.

In the foreign exchange market, the euro is moving lower against the dollar as the European currency traded early in the afternoon at $1.0873, against $1.0795 when the market opened.