European bonds mark time before key inflation report

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Oct 1 (Businesshala) – European bond yields tracking a broad-based overnight decline in U.S. Treasury yields eased on Friday, though yields on core German debt are set to rise for the sixth consecutive week, ahead of a report by inflation. likely to show pressure. The Eurozone has reached a 13-year high.

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Headline inflation in the eurozone probably rose to 3.3% on an annualized basis in September, the highest since 2008, and sharper than 3% in August, with energy prices likely to rise.

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The data comes after some price measures in Germany and France on Thursday showed a pickup in inflationary pressures, even as top European central bank policymakers temporarily curtailed inflation growth. .

Official data showed French inflation hit a nearly 10-year high of 2.7% in September, though slightly below forecast.

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German consumer prices, to make them comparable with inflation data from other EU countries, increased by 4.1% year-on-year compared to 3.4% in August, the highest rate recorded since January 1997, when The EU-reconciliation series began.

The benchmark 10-year German bond yield softened 3 bps to a three-day low of -0.223% on Friday, after the yield hit a three-month high of -0.174% on Tuesday.

The drop in yields follows a broad drop in US Treasury yields across the board on the benchmark US 10-year loan, down 5 bps from a psychologically significant 1.50%.

While the decline in yields was primarily attributable to quarter-end position inflows, there was no escaping the fact that September was one of the worst monthly performances for bond markets due to a deadly combination of high inflation expectations and aggressive central banks. there was one.

Deutsche Bank noted that US Treasuries were down 1.2% over the past month, their worst monthly performance since February. The increase in yields was reflected on a monthly basis across major bond markets, with German, French and Italian yields.

Elsewhere, the benchmark British government debt yield stabilized on Thursday after hitting its highest level in more than two years.

Reporting by Saikat Chatterjee; Editing by Giles Elgood

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