Tranzactioneaza ishares Global Inflation Linked Govt Bond Ucits ETF Usd (acc) (DE.IUS5) - 145.1401 EUR (%) Tranzactioneaza

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Euro zone yields rise as rush to safe-haven assets pauses


Citi analysts said a range of 1% to 1.5% for the 10-year Bund yield looked fairer than 1.5% to 2%, adding there were reasons to be uncertain.&nbsp

ING analysts also said yields might have peaked recently but they argued implied volatility remained high and could still lead German borrowing costs to 2%. Germany's 10-year government bond yield, the bloc's benchmark, rose 3.5 bps to 1.27%. Trading was thinned by the U.S. Independence Day holiday.&nbsp

"Further downside for short-end rates looks limited," Commerzbank analysts said. "Further disappointing (economic) activity data could thus turn the latest bullish steepening into a long-end flattening. We still suggest buying Bunds into dips," they added.&nbsp

The spread between Germany's 10-year and 2-year bond yields widened from 40 bps in mid-June to around 80 bps last week. It was at 68.9 on Monday.&nbsp

Italy's 10-year government bond yield rose 6.5 bps to 3.27%, with the spread between Italian and German 10-year yields widening to 199 bps.

(DE.IUS5) (DE.DBX0)

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Europe’s fear gauge has hit its highest level since May 2020 (DE.IUS5)


Italy’s 10-year bond yield rose to 4% — a level not seen since 2014. Greece’s 10-year bond yield hit 4.43% Monday, whereas Portugal’s and Spain’s 10-year bond yield both increased to 2.9%. The International Monetary Fund said in May that it expects Italy’s growth rate to slow this year and next. Annual growth is seen at around 2.5% this year and 1.75% in 2023. At the height of the sovereign debt crisis, which started in 2011, bond yields spiked and a number of countries were forced to impose painful austerity measures after requesting bailouts. “Austerity as a political response remains unlikely. Italy and others receive significant funds from the EU’s 750 billion Next Generation EU program anyway. Public investment is likely to go up,” Schmieding also said.


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Market Optimists Make the Case That 2022 Will End on High Note


Longtime bull Neil Dutta, head of economics at Renaissance Macro Research, for example, pointed to factors that are still returning to normal after the pandemic lockdowns, including labor participation rates and demand for durable goods, which drove prices higher. As life continues to settle down, he said, the Federal Reserve may find it easier to battle inflation. Fed officials are mum ahead of their meeting next week and the data calendar is light until Friday’s inflation report. Stocks rose in another choppy session, as 10-year Treasury yields slipped back below 3%. (DE.IUS5)


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Euro-Area Inflation Hits Record as ECB Mulls How Quickly to Hike (DE.IUS5)


Consumer prices jumped 8.1% from a year earlier in May, exceeding the 7.8% median estimate in a Bloomberg survey. The acceleration was driven by food and energy after Russia’s invasion of Ukraine sent commodity prices soaring. A gauge that excludes volatile items like those rose 3.8%. While price growth should peak this quarter, it will still average more than the ECB’s 2% target next year, according to European Union forecasts. A European Commission survey this week showed inflation concerns among consumers retreating, though remaining double the average level since 2000. After German inflation reached 8.7%, Finance Minister Christian Lindner on Monday called the fight against it the “top priority,” while advocating an end to expansive fiscal policy.


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Gundlach – Inflation May Hit 10% (US.CBU0) (DE.IUS5)


On Tuesday, the day that government-reported inflation hit 8.5%, Jeffrey Gundlach said it may reach 10% this year. Gundlach was a keynote speaker at the Exchange ETF conference in Miami. He is the founder and chairman of Los Angeles-based DoubleLine Capital. “A year ago, inflation was thought to be transitory,” Gundlach said, “but the only thing transitory was the use of word ‘transitory.’” “Maybe we will see 10% inflation."

The world has become more reliant on Chinese goods since the pandemic started in 2020, which means the latest round of lockdowns have a greater impact on global growth and inflation, they said.


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Bonds Flash Growth Warning as Global Stocks Mixed: Markets Wrap (DE.IUS5) (DE.DBX0) (US.CBU0)


Sovereign bonds tumbled, while European stocks gained and U.S. equity futures fell on Monday as economic risks from inflation and tightening monetary policy hit sentiment.

The U.S. 10-year Treasury yield climbed past 2.5%, above a technical trendline that’s served as a ceiling since the late 1980s. Bonds slid from Australia to the U.K., while Japan’s 10-year rate extended gains even after the country’s central bank announced two unlimited buying operations to keep yields below the top of its allowed range.


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Bond (US.CBU0) (DE.IUS5) Rout Widens as Quickening Inflation Adds to Rate-Hike Bets


Australia’s 10-year yields climbed as much as six basis points to 2.43%, the highest since March 2020, while similar-maturity New Zealand yields topped 3% for the first time since 2018. New Zealand food prices jumped at the fastest annual pace in over a decade, data published Friday showed, after U.S. figures released Thursday showed consumer prices surged at an annual rate of 7.9%.


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