AVN 64.74 Decreased By ▼ -0.26 (-0.4%)
BAFL 31.23 Increased By ▲ 0.08 (0.26%)
BOP 4.82 Increased By ▲ 0.11 (2.34%)
CNERGY 3.86 Decreased By ▼ -0.02 (-0.52%)
DFML 14.11 Increased By ▲ 0.41 (2.99%)
DGKC 41.69 Increased By ▲ 0.42 (1.02%)
EPCL 46.36 Decreased By ▼ -0.33 (-0.71%)
FCCL 11.41 Decreased By ▼ -0.01 (-0.09%)
FFL 5.06 Increased By ▲ 0.02 (0.4%)
FLYNG 5.78 Decreased By ▼ -0.04 (-0.69%)
GGL 9.92 Decreased By ▼ -0.03 (-0.3%)
HUBC 64.23 Increased By ▲ 0.13 (0.2%)
HUMNL 5.61 Decreased By ▼ -0.04 (-0.71%)
KAPCO 27.84 Increased By ▲ 0.04 (0.14%)
KEL 2.15 Increased By ▲ 0.02 (0.94%)
LOTCHEM 24.52 Increased By ▲ 0.22 (0.91%)
MLCF 21.75 Increased By ▲ 0.35 (1.64%)
NETSOL 84.19 Decreased By ▼ -0.01 (-0.01%)
OGDC 87.30 Decreased By ▼ -0.64 (-0.73%)
PAEL 10.95 Increased By ▲ 0.05 (0.46%)
PIBTL 4.24 Increased By ▲ 0.06 (1.44%)
PPL 76.63 Decreased By ▼ -1.07 (-1.38%)
PRL 13.69 Increased By ▲ 0.07 (0.51%)
SILK 0.90 Increased By ▲ 0.01 (1.12%)
SNGP 41.52 Decreased By ▼ -0.41 (-0.98%)
TELE 5.95 Increased By ▲ 0.08 (1.36%)
TPLP 15.77 Decreased By ▼ -0.01 (-0.06%)
TRG 111.25 Decreased By ▼ -1.05 (-0.93%)
UNITY 13.92 Decreased By ▼ -0.03 (-0.22%)
WTL 1.14 Increased By ▲ 0.01 (0.88%)
BR100 4,046 Decreased By -1.8 (-0.05%)
BR30 14,434 Decreased By -33.1 (-0.23%)
KSE100 40,620 Decreased By -53.1 (-0.13%)
KSE30 15,170 Decreased By -20 (-0.13%)
Markets

Euro zone bond yields flat, Italy's new issuance in focus

  • Italy started the process of selling new 50-year and 7-year bonds via a syndicate of banks on Wednesday, having flagged the new issues the previous day.
Published April 8, 2021
Follow us

LONDON: Euro zone bond yields were flat on Wednesday, with southern European debt stabilising after a sell-off in the previous session as markets braced for new supply from Italy and Portugal.

Italy started the process of selling new 50-year and 7-year bonds via a syndicate of banks on Wednesday, having flagged the new issues the previous day.

Portugal raised, via a syndicate of banks, 4 billion euros from a 10-year bond on the back of 30 billion euros of demand, according to a lead manager memo.

The tone across euro zone debt markets was largely subdued, with most 10-year bond yields down 1-2 basis points (bps) on the day following an overnight fall in U.S. Treasury yields.

"Overall, the pull higher from U.S. rates is alive and well and the rebound in euro zone bond markets is largely technical and temporary in nature," said senior ING rates strategist Antoine Bouvet.

Germany's 10-year Bund yield was flat at -0.32pc, down from recent highs around -0.26pc.

IHS Markit's euro zone Services Purchasing Managers' Index (PMI) rose to 49.6 in March from February's 45.7, higher than a flash estimate of 48.8 and only just shy of the 50 mark that separates growth from contraction.

The euro zone economy is on course for a robust recovery in the second half of the year that could allow the European Central Bank to start phasing out its emergency bond purchases in the third quarter, Dutch central bank chief Klaas Knot said.

The ECB bought a net 6.178 billion euros ($5.20 billion) of assets last week as part of its quantitative easing programme, below the 23.995 billion euros it purchased a week earlier.

Italy's 10-year bond yield was unchanged at 0.70pc, having risen sharply on Tuesday as investors braced for new supply. The gap over German Bund yields held just above 100 bps.

Analysts said bond spreads were moving back into focus, especially after a decision by the German constitutional court last month to stop the ratification of the European Union's Recovery Fund prompted investors to price some risk back into peripheral bonds.

"The Tesoro's (Italian Treasury's) announcement of a new syndicated 50-year BTP caught markets off guard, with 10-year and 30-year (yield) spreads versus Bunds widening up to 7 bps to the highest level in almost a month," said Michael Leister, head of interest rate strategy at Commerzbank, referring to Tuesday's market moves.

"While thinner Easter liquidity might also play a role, these moves add weight to our tactical shorts in Italy versus semi-core (bonds) and Spain as supply indigestion risk is being compounded by doubts regarding the NGEU (Next Generation EU), the ECB's resolve and less generous carry differentials."

Comments

Comments are closed.

Euro zone bond yields flat, Italy's new issuance in focus

'Higher than expectations': Pakistan's headline inflation clocks in at 27.6% in January

Rupee sustains losses, settles at 268.83 against US dollar

Fawad Chaudhry released from Adiala jail

Imran says governor KP's letter to ECP regarding delay in polls raises 'suspicions’

Cannot rule out internal assistance for Peshawar bombing: police

Peshawar attack: ‘Who brought the terrorists back?’, asks PM Shehbaz

Adani abandons $2.5 billion share sale in big blow to Indian tycoon

Hyundai-Nishat jacks up car prices by up to Rs500,000 in Pakistan

Maryam Nawaz says PML-N will clean sweep upcoming elections

PSX sees range-bound session, KSE-100 falls 0.13%