Bonds Are About To Surge

Forex News

On Thursday, the European Central Bank will have a meeting. Borrowing costs are still high, US data is disappointing and the eurozone inflation is muted. That’s why, Central Banks started considering policy tightening and at the coming meeting Mario Draghi might announce that ECB exits from the ultra-loose policy, which in turn will boost government bond yields.

Eurozone CPI increased from 1.4% to 1.3% yoy in prior month. Excluding food and energy, the index rose to 1.2% yoy. Eurozone bond yields dropped 2-5 bps. German 10-year bond yield fell from the year and a half maximum of 0.88% to 0.51%.