LONDON: A euro zone bond market gauge of inflation expectations fell on Wednesday, tracking a similar move in the U.S. debt market after U.S. consumer prices declined for the first time in nearly 1-1/2 years.
The five-year, five-year forward breakeven rate - the European Central Bank's preferred measure of what the market thinks the inflation outlook is - fell to 1.9341 percent from around 1.96 percent before the U.S. CPI report. Traders said that was the lowest since August.
"The big impact today was that the U.S. inflation print was very low and that has a bearing on other markets to some extent," a trader said.
"It looks very similar to levels hit in August, which were also similar to lows hit in the euro zone crisis period of 2010 and 2011."
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