ANL 34.32 Decreased By ▼ -0.20 (-0.58%)
ASC 14.85 Decreased By ▼ -0.31 (-2.04%)
ASL 24.50 Decreased By ▼ -0.33 (-1.33%)
AVN 90.24 Decreased By ▼ -4.76 (-5.01%)
BOP 7.79 Decreased By ▼ -0.08 (-1.02%)
BYCO 10.05 Decreased By ▼ -0.26 (-2.52%)
DGKC 124.20 Decreased By ▼ -2.40 (-1.9%)
EPCL 56.30 Decreased By ▼ -0.86 (-1.5%)
FCCL 24.31 Decreased By ▼ -0.19 (-0.78%)
FFBL 27.60 Decreased By ▼ -0.36 (-1.29%)
FFL 16.05 Increased By ▲ 0.01 (0.06%)
HASCOL 9.74 Decreased By ▼ -0.28 (-2.79%)
HUBC 80.00 No Change ▼ 0.00 (0%)
HUMNL 6.44 Decreased By ▼ -0.01 (-0.16%)
JSCL 20.50 Increased By ▲ 0.09 (0.44%)
KAPCO 40.21 Decreased By ▼ -0.73 (-1.78%)
KEL 3.85 Decreased By ▼ -0.02 (-0.52%)
LOTCHEM 16.25 Decreased By ▼ -0.99 (-5.74%)
MLCF 46.60 Decreased By ▼ -0.31 (-0.66%)
PAEL 35.10 Decreased By ▼ -1.07 (-2.96%)
PIBTL 10.33 Decreased By ▼ -0.16 (-1.53%)
POWER 9.25 Decreased By ▼ -0.10 (-1.07%)
PPL 85.50 Decreased By ▼ -0.24 (-0.28%)
PRL 25.01 Decreased By ▼ -0.70 (-2.72%)
PTC 9.55 Increased By ▲ 0.10 (1.06%)
SILK 1.24 Increased By ▲ 0.07 (5.98%)
SNGP 38.82 Decreased By ▼ -0.54 (-1.37%)
TRG 167.40 Increased By ▲ 7.79 (4.88%)
UNITY 30.65 Decreased By ▼ -0.10 (-0.33%)
WTL 1.53 Increased By ▲ 0.10 (6.99%)
BR100 4,820 Decreased By ▼ -31.91 (-0.66%)
BR30 25,669 Decreased By ▼ -2.82 (-0.01%)
KSE100 44,978 Decreased By ▼ -208.43 (-0.46%)
KSE30 18,443 Decreased By ▼ -42.02 (-0.23%)

Coronavirus
VERY HIGH
Pakistan Deaths
15,501
5824hr
Pakistan Cases
725,602
458424hr
Sindh
269,126
Punjab
250,459
Balochistan
20,321
Islamabad
66,380
KPK
99,595

LONDON: Euro zone bond yields inched higher on Thursday as investors welcomed signs of progress in resolving the U.S.-China trade war, and seized on recent doubts about whether a European Central Bank stimulus package next week can match expectations.

After a strong rally in August, euro zone bonds stumbled in recent days.

Reduced political risk, from the approval of a coalition government in Italy to the UK parliament's battle to avert a no-deal Brexit, have helped improve investors' mood, reducing demand for safe-haven government bonds.

On Thursday, China's commerce ministry said Beijing and the United States agreed to hold high-level trade talks in early October in Washington, easing fears that the escalating trade war will trigger a global recession.

Comments ECB policymakers on Wednesday also appeared to dampen expectations for aggressive stimulus next week.

"Investors are a little bit concerned that the ECB won't act as expansionary as expected," said Daniel Lenz, a rates strategist at DZ Bank.

Lenz said that the market would likely struggle for direction until next Thursday's meeting either disappointed investors or sparked another leg in the rally.

He also noted that this week's ECB comments fit into a pattern of policymakers raising expectations, before dampening them in the weeks preceding a meeting to give themselves room not to disappoint on the day.

The 10-year German Bund rose more than 1 basis point to -0.66%, away from the record lows of -0.743% touched on Tuesday.

Other top-rated euro zone yields also increased , although the rises were small.

"To summarise the tone of the various comments so far from officials (anonymous or not), we would say that at least a degree of doubt as to the ECB's commitment to restarting the APP (Asset Purchase Programme) in September should be priced in," ING fixed income strategists wrote in a research note.

"The modest back-up in EGB (European government Bonds) yields (Italy excepted) is in our view still fairly minor compared to what market reaction would be if an underwhelming package is unveiled on 12 September."

Italian yields, which have spiralled lower in the past week after agreement was reached on a new coalition government in Rome, steadied near their record lows.

The 10-year Italian yield was unchanged at 0.826% , close to the record low of 0.803%. The and 30-year Italian bond yields were also little moved in early trade.

Italian bonds, which still yield far more most euro zone peers such as Spain and Portugal, have rallied as investors welcome the formation of a government that could prove to be more fiscally responsible than the last.

Analysts say that if after the recent plunge lower in yields, many international investors remain underweight Italian bonds and with the yields relatively attractive, more could pile back in. DZ Bank is targeting a spread between the benchmark German 10-year Bund and the 10-year Italian bond of 120 basis points - 30 basis points lower than current levels.

Copyright Reuters, 2019