Two-year German bond yields hit session high
LONDON: Yields on two year German government bonds hit session-highs on Thursday as European Central Bank President Jean-Claude Trichet flagged downside risks to growth but was not a dovish as some in the market had been hoping for.
Downside risks to economic growth in the euro zone have intensified, Trichet said during a news conference after the bank decided to keep interest rates steady at 1.5 percent.
"There was some expectation of a rate cut, which didn't come, or a relatively softer tone, but he hasn't changed his tone, and we have the same message as in September," said Achilleas Georgolopoulos, strategist at Lloyds Bank in London.
Two-year German government bond yields rallied to a session high of 0.57 percent, up 6.8 basis points on the day. It was little changed prior to the news conference.
December Euribor futures fell across the 2011/12 curve, pushing implied rates higher, with the December 2011 contract reaching 98.69 compared to 98.75 before the news conference.
Copyright Reuters, 2011
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