AIRLINK 74.00 Decreased By ▼ -0.25 (-0.34%)
BOP 5.14 Increased By ▲ 0.09 (1.78%)
CNERGY 4.55 Increased By ▲ 0.13 (2.94%)
DFML 37.15 Increased By ▲ 1.31 (3.66%)
DGKC 89.90 Increased By ▲ 1.90 (2.16%)
FCCL 22.40 Increased By ▲ 0.20 (0.9%)
FFBL 33.03 Increased By ▲ 0.31 (0.95%)
FFL 9.75 Decreased By ▼ -0.04 (-0.41%)
GGL 10.75 Decreased By ▼ -0.05 (-0.46%)
HBL 115.50 Decreased By ▼ -0.40 (-0.35%)
HUBC 137.10 Increased By ▲ 1.26 (0.93%)
HUMNL 9.95 Increased By ▲ 0.11 (1.12%)
KEL 4.60 Decreased By ▼ -0.01 (-0.22%)
KOSM 4.83 Increased By ▲ 0.17 (3.65%)
MLCF 39.75 Decreased By ▼ -0.13 (-0.33%)
OGDC 138.20 Increased By ▲ 0.30 (0.22%)
PAEL 27.00 Increased By ▲ 0.57 (2.16%)
PIAA 24.24 Decreased By ▼ -2.04 (-7.76%)
PIBTL 6.74 Decreased By ▼ -0.02 (-0.3%)
PPL 123.62 Increased By ▲ 0.72 (0.59%)
PRL 27.40 Increased By ▲ 0.71 (2.66%)
PTC 13.90 Decreased By ▼ -0.10 (-0.71%)
SEARL 61.75 Increased By ▲ 3.05 (5.2%)
SNGP 70.15 Decreased By ▼ -0.25 (-0.36%)
SSGC 10.52 Increased By ▲ 0.16 (1.54%)
TELE 8.57 Increased By ▲ 0.01 (0.12%)
TPLP 11.10 Decreased By ▼ -0.28 (-2.46%)
TRG 64.02 Decreased By ▼ -0.21 (-0.33%)
UNITY 26.76 Increased By ▲ 0.71 (2.73%)
WTL 1.38 No Change ▼ 0.00 (0%)
BR100 7,874 Increased By 36.2 (0.46%)
BR30 25,596 Increased By 136 (0.53%)
KSE100 75,342 Increased By 411.7 (0.55%)
KSE30 24,214 Increased By 68.6 (0.28%)

LONDON: Euro zone government bond yields reached the highest in over two months on Friday after a report suggested that the European Central Bank expects to hit its inflation target by 2025, and even a subsequent partial denial did not reverse the move.

ECB chief economist Philip Lane revealed in a private meeting with German economists that the ECB expects to hit its 2% inflation goal by 2025, the Financial Times said on Thursday in a report that was partly disputed by the bank.

In addition, euro zone inflation for the month of August was confirmed at a 10-year high of 3%, well above the ECB's target. Euro zone yields rose broadly on Friday, with Germany's 10-year government bond yield rising to a 10-week high at -0.265%. It was up 3 bps at -0.28% by 1506 GMT. bps

Other euro zone bond yields were also up 2-3 basis points and also hitting similar highs in many cases. "There's a lot of water that needs to flow under the bridge before we get to 2023, let alone 2025," said Deutsche Bank chief strategist Jim Reid. "However, if a path to such a number does appear in their forecasts soon it will impact ECB messaging going forward, which will be important to markets."

The ECB's response to inflation is currently one of the most talked-about topics in government bond markets. The central bank has pumped unprecedented amounts of stimulus into the COVID-19-hit euro zone economy. But recent inflation figures have shown a sharp increase towards its goal, which would normally lead to a tightening of policy.

The central bank has been keen to stress it sees consumer price rises - such as Friday's euro zone inflation reading - as temporary and that it would be cautious about withdrawing stimulus as the bloc recovers from 2020's recession, but speculation continues to swirl on the subject. But focus remains on whether inflation may come in higher than expected. That may be the case if supply constraints persist and wages are raised during upcoming negotiations, ECB Vice President Luis de Guindos said on Friday, while Irish central bank chief Gabriel Makhlouf said there is "considerable uncertainty about the persistence of price pressures".

Comments

Comments are closed.