Eurozone Bond Yields Rise Awaiting ECB Statement
Central banks around the world are moving towards a more stringent monetary policy. Stock indices in the US fell after the recent decision of the Federal Reserve to raise rates by 25 points. The Fed also indicated that there might be two more increases this year. Traders are now waiting for the meeting of the European Central Bank (ECB).
It is expected that the ECB will discuss whether to stop by the end of the year its scheme for buying bonds worth 2.55 trillion euros (3 trillion dollars) and, possibly, will signal a change of policy. Completion of the quantitative easing (QE) program will be another step towards ending the unprecedented ECB stimulation scheme.
Most 10-year Eurozone bond yields rose around 2 basis points. German Bund yield traded at 0.50%, just below an almost three-week high hit earlier this week. Italian 10-year yields climbing 7 bps to around 2.88%.
Analysts suggest, that the biggest complication for the ECB might be the increasingly murky economic outlook. The continent faces a developing trade war with the US, a populist challenge from Italy’s new government and softening export demand.