Eurozone government bond yields near multi-month lows amid economic worries

UNITED STATES, WASHINGTON (EDUFINTECH) – Borrowing costs in the eurozone eased marginally on Wednesday, holding close to multi-month lows hit yesterday amid concerns over global growth.

The yield on 10-year German government bonds fell one basis point to -0.42%, holding close to more than five-month lows reached the day before, at -0.44%.

The 30-year yield also lost one basis point, falling to 0.04%. Since the beginning of the week, it has dropped 8 basis points, close to 0%.

“The rally at these levels may be losing momentum, but the resilience of the eurozone bond markets looks set to continue,” said Christoph Rieger of Commerzbank.

Analysts say an auction of 30-year German bonds later on Wednesday could be a test of investor appetite for long-term bonds after the recent spike in prices and falling yields.

The yield on government bonds of the euro zone decreases before the meeting of the ECB

UNITED STATES, WASHINGTON (EDUFINTECH) – Yields on eurozone government bonds fell on Monday ahead of the European Central Bank meeting. Alarms about the spread of the delta strain of coronavirus are putting pressure on risk appetite.

The yield on 10-year German government bonds fell 1 basis point after hitting a low since March 29 of -0.369%.

The yield on 10-year European Union bonds, issued in June, is inactive, and previously reached an all-time low of -0.114%.

“The ECB meeting is central because this time it looks like it will be different, controversial and have tangible policy implications,” analysts at Commerzbank said in a note to clients.

“The comment of ECB head Christine Lagarde that the curtailment of PEPP may be followed by a transition to a new format is already causing speculation … ahead of Thursday’s meeting,” analysts at DZ Bank note.

Italian government bonds, which could suffer from the ECB’s reduced purchasing flexibility after the PEPP ended, came under some pressure: the yield on 10-year bonds rose one basis point to 0.71%.

Saudi Arabia, Oman urged to continue OPEC cooperation with allies

UNITED STATES, WASHINGTON (EDUFINTECH) – Saudi Arabia and Oman called on Monday for continued cooperation between OPEC and its allies to stabilize and rebalance the oil market, the two Gulf states said in a joint statement.

US House of Representatives approves $ 715 billion infrastructure project

UNITED STATES, WASHINGTON (EDUFINTECH) – The Democratic-controlled US House of Representatives on Thursday voted in favor of a $ 715 billion land transportation and water infrastructure bill. Democrats say this is the first step towards a larger infrastructure plan that Congress hopes to pass in September.

The bill includes provisions from President Joe Biden’s original $ 2.3 trillion infrastructure proposal: it includes additional spending on highways, bridges, highway safety, electric car charging points, railroad, transit, water and sewage systems.

It also provides funding for programs to fund major projects, including the construction of four state-of-the-art $ 11.6 billion Hudson River overpasses that will connect New Jersey to New York’s Penn Station in downtown Manhattan.

According to the results of the vote, which ended with a result of 221-201, the bill was sent to the Senate, where the Democrats have a 1 vote advantage.

Eurozone economic recovery remains fragile – Lagarde

UNITED STATES, WASHINGTON (EDUFINTECH) – The eurozone economy is starting to recover from the recession caused by the pandemic, but that recovery remains fragile, European Central Bank Governor Christine Lagarde said in an interview published Friday.

“We have agreed to maintain (emergency stimulus) measures at least until March 2022, and in any case until we consider that the crisis phase of the coronavirus is over,” Lagarde said in an interview with regional French publication La Provence. the economy is now starting to gain momentum, it remains fragile.”

Fed leadership: “temporary” surge in inflation may last

UNITED STATES, WASHINGTON (EDUFINTECH) – The period of high inflation in the US could last longer than expected, members of the Federal Reserve’s Open Market Committee (FOMC) said Wednesday.

Atlanta Federal Reserve Bank chief Rafael Bostic said he now expects interest rates to need to be raised in late 2022, given that the US economy is estimated to grow 7% this year and inflation will be well above the Fed’s target in 2%.

“Given the unexpected growth in the latest data, I have shifted my forecast,” Bostic said. He is among seven Fed officials who predicted at a central bank meeting last week that the overnight rate may need to be raised from its current near-zero rate next year.

Bostic and FOMC member Michelle Bowman said that while they largely agree that the recent price increases will be temporary, they also believe that inflation may take longer than expected to ease.

“The temporary will be a little longer than we originally expected … Instead of two to three months, it could take six to nine months,” Bostic said in an interview with NPR.

Bowman, speaking at the Federal Reserve Bank of Cleveland conference, agreed that prices are rising due to supply chain disruption and rising demand as the economy opens up – factors that should disappear over time.

However, she did not specify a specific timeline, saying that “it may take some time,” and this will need to be closely monitored while the Fed decides its policy.

Eurozone bond yields skyrocket after Fed hawkish meeting

UNITED STATES, WASHINGTON (EDUFINTECH) – Eurozone government bond yields jumped after a hawkier-than-expected meeting of the US Federal Reserve Board.

The Fed is now waiting for its first key interest rate hike in 2023 instead of 2024, and has begun debates about when and how it would be appropriate to start scrapping its massive bond-buying program.

The yield on 10-year German government bonds increased 4.5 basis points to minus 0.155%. During the trades, the indicator renewed its maximum yield since May 25.

The comparable figure for Italy’s 10-year bonds rose 6 basis points to a weekly peak of 0.841%.

US Senate passes bill to protect against technological threats from China

UNITED STATES, WASHINGTON (EDUFINTECH) – The US Senate on Tuesday backed 68 votes and 32 against a sweeping bill designed to boost the country’s ability to compete with Chinese technology.

The bill provides for about $ 190 billion in US technology and research efforts, including $ 54 billion to increase the production and development of semiconductors and telecommunications equipment in the United States. This amount also includes $ 2 billion for projects in the field of chips used by automakers, faced with massive shortages and as a result – a significant reduction in production.

The bill must pass a vote in the House of Representatives, after which it will be sent to the White House for signing by President Joe Biden.

The Chinese parliament on Wednesday expressed outrage over the bill, the official Xinhua news agency reported.

The Foreign Affairs Committee of the National People’s Congress said in a statement that the American bill reflects the mentality of the Cold War and is interference in the internal affairs of the PRC, the agency reported.

Now is not the time to start winding down stimulus – Fed Williams

UNITED STATES, WASHINGTON (EDUFINTECH) – While it makes sense for Federal Reserve officials to start discussing monetary policy adjustments, the U.S. economy is still far from where the central bank could start winding down support, Federal Reserve Bank of New York President John Williams said Thursday.

“We are still far from making the ‘significant progress’ we are striving for in terms of adjusting our purchases,” Williams said in an interview with Yahoo Finance, referring to the $ 120 billion in monthly bond purchases. I think now is the time to take some action.”

Asked about the growing popularity of the NY Fed’s reverse repo mechanism, which allows money market funds and other firms to “park” their funds overnight, Williams said the program is working as expected.

Williams said the Fed is ready to make the necessary technical adjustments to keep the key rate within the target range.

“The program not only works exactly as intended, but we also have the ability to customize it,” he said.

China bans banks from selling commodity-related investment products to individuals

UNITED STATES, WASHINGTON (EDUFINTECH) – The Chinese banking regulator told lenders that they should stop selling commodity-linked investment products to retail investors to limit losses amid volatile commodity prices, three sources familiar with the matter told Reuters.

The regulator also ordered banks to completely shut down their existing books of these products, which they sell to individual investors, sources associated with and informed about the decision said.

The decision of the China Banking and Insurance Regulatory Commission has not been previously reported. The order was released this year, two sources said.