Wed Oct 22, 2014 6:12am EDT
(Adds stress tests news, updates prices)
By Michael Urquhart
LONDON Oct 22 (Reuters) - Yields on lower-rated euro zone government bonds retreated further on Wednesday from highs hit last week as the possibility of European Central Bank purchases of corporate bonds brought riskier assets back into favour.
A mid-morning report that at least 11 banks would fail ECB stress test put pressure on some government bond markets, including Italy and Austria, but they quickly bounced back.
The ECB is considering buying corporate bonds and may decide as soon as December with a view to begin purchases early next year, several sources familiar with the situation told Reuters.
The news on Tuesday had helped peripheral euro zone debt close the yield gap against benchmark German government bonds, a move that continued on Wednesday morning.
"The news of bond buying had quite a beneficial effect on the non-German bond markets, for good reason, so spread narrowing was quite substantial and today there is still some after-effect of that," said KBC strategist Piet Lammens.
The yield on the 10-year German Bund fell by 1 basis point to 0.86 percent at 0913 GMT, while Greek yields , which rose above 9 percent last week, dropped by 49 basis points to 7.33 percent.
Italian and Austrian yields bumped up from their day's lows after Spanish news agency Efe reported that banks from six European countries are set to fail a region-wide financial health check this weekend. Even though no Spanish banks were named in the report, the country's bond yields also inched up in step with its peripheral proxy Italy.
But by 1000 GMT, Italian and Spanish bonds had headed back towards day's lows and were both down 3 bps at 2.50 and 2.20 pct respectively, while Austrian equivalents were 1bps lower at 1.09 pct.
The results of the Asset Quality Review are due to be unveiled on Sunday.
"The market is pricing in some nervousness around the AQR because as we get closer to the release of the results there is mounting speculation on both sides, positive and negative," said Patrick Jacq, rate strategist at BNP Paribas.
The major piece of data out on Wednesday is U.S. consumer inflation due at 1230 GMT, where a surprise to the downside could push back expectations for a tightening of monetary policy by the Federal Reserve and give bond markets another boost.
"If you have a surprise there, especially on the downside ... this could also push us lower in terms of euro yield," said Alessandro Tentori, global head of rates strategy at Citi.
Also on Wednesday, bids on Germany's 30-year bond auction came up short of the 2 billion euro target, leaving it technically uncovered. This came as no surprise to analysts who predicted it would be a tough sell given yields remain close to an all-time low below 1.60 percent hit last week.
Germany's benchmark 30-year bond was 1 bps lower on the day at 1.75 percent after the auction.
"At the moment core bonds are on the defensive, but they are very resilient," said KBC's Lammens. "On days when people favour equities and there is a risk-on then you'll see some weakness in the bond market, but not major." (Editing by Mark Heinrich)
- Link this
- Share this
- Digg this
- Reprints
Anda sedang membaca artikel tentang
Peripheral bond yields fall further on hopes for ECB action
Dengan url
http://sarapannasiudak.blogspot.com/2014/10/peripheral-bond-yields-fall-further-on.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Peripheral bond yields fall further on hopes for ECB action
namun jangan lupa untuk meletakkan link
Peripheral bond yields fall further on hopes for ECB action
sebagai sumbernya
0 komentar:
Posting Komentar