Tag Archives: BONDS/ (UPDATE 2)

UPDATE Eurozone bond yields fell, Italy hit an all-time low | Instant News


* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Updating prices, adding to record low yields in Italy)

MILAN, Feb 11 (Reuters) – Eurozone borrowing costs fell on Thursday, with Italian 10-year bond yields dropping to all-time lows, as global markets focus on the dovish Federal Reserve outlook after unexpectedly weak reading on inflation US.

The European Commission, meanwhile, said the eurozone economy will recover less than previously thought from this year’s coronavirus slump, adding that 2022 growth will be stronger than previously estimated.

The yield on the German 10-year government bond fell 2.5 basis points to -0.463% after hitting a one-week low of -0.474%.

The 10-year US Treasury yield fell to 1.14%, far from a peak of 1.2% Monday, as US inflation data on Wednesday missed expectations.

On Wednesday evening, Federal Reserve Chairman Jerome Powell said he would like to see inflation hitting 2% or more before even thinking of easing super easy bank policies.

“Benign US CPI results in January mean markets don’t have to worry about a hawkish Fed for now. Looking at a broader set of indicators than just interest rates suggests that the trading reflection is alive and kicking. Risk appetite should continue to improve, driven by lower real interest rates, ”ING said in a note to clients.

According to Saxo Bank fixed income strategist Althea Spinozzi, the market believes that the lockdown and slowdown in the economy will be prolonged and that the central bank will continue to be dovish.

“Today’s decline in German bond yields is a rebound after the recent sell-off,” he added.

Italian bond yields hit all-time lows after borrowing costs fell to a new record depth at an auction on Thursday as Mario Draghi is expected to present his new coalition government in the coming days.

Italy’s anti-establishment 5-star movement is beginning to vote on whether to support Draghi’s cabinet, in what could be one of the last steps before a new government takes shape.

The yield on Italian 10-year government bonds fell 4 basis points, after hitting an all-time low of 0.461%.

The Italian / German 10-year yield spread trades at 91.5 basis points, approaching the lowest level in more than five years.

“We are unlikely to witness further declines in Italian bond yields over the next few weeks. But if Draghi gets the support of EU leaders for his coalition government and his projects, we could see further declines, “said MFS fixed income research analyst Annalisa Piazza.

The focus now turns to reading about Americans filing applications for weekly unemployment benefits at a later date.

Reporting by Sara Rossi; Edited by Larry King / Mark Heinrich / Pravin Char

.



image source

UPDATED The 2-Draghi Effect pushed the Italy-Germany gap to its lowest level in 5 years | Instant News


* Italian 10-year yields fell 10 bps this week

* German yields rise despite poor industry data

* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Added details, latest prices)

MILAN / LONDON, Feb 5 (Reuters) – Italian 10-year government bond yields headed for their biggest weekly decline since July on Friday, while the spread on German yields narrowed to the smallest level in five years as former head of the European Central Bank Mario Draghi starts talks to form a new government.

Trading on eurozone debt markets was generally weak at the end of the week. It was slightly moved by data showing US job growth rebounded moderately in January, in line with forecasts and which economists said supported the case for more government aid money.

Global stocks approach record highs as progress in vaccine distribution and hopes of US stimulus pushes bets on further normalization in the global economy.

That backdrop boosted sentiment towards riskier assets such as European peripheral bonds, with Italy set to end the week at its highest following this week’s political developments.

Draghi, given the mandate to form a new Italian government, will end a round of consultations on Saturday. It remains unclear whether he can win support from the anti-establishment 5 Star Movement, the largest party in parliament.

Italian 10-year BTP, or government bonds, fell as far as 0.51%, the lowest level since January 11, before rebounding to 0.54%. It’s down more than 10 bps this week.

Italy / Germany’s 10-year yield difference narrowed to around 94 basis points, since at least the start of 2016.

“We have seen how the market is not only like Draghi, but also likes Draghi and foreign investors are supporting the rally in BTP,” said MFS fixed income research analyst Annalisa Piazza.

Piazza said room for further tightening was limited, although Italy could see further performance over its eurozone counterparts if Draghi’s government succeeds in executing its program in the medium term.

“The market is expecting a government led by Draghi. But even if the former ECB chief is unable to form a government, we will see a sell-off in the short term which will translate into interest rate compression in the long term, “said Althea Spinozzi, fixed income strategist at Saxo Bank.

The UniCredit analyst added that the spread of further compression in Italy will likely depend on the extent of parliamentary support for the government and the willingness of foreign investors to increase their exposure to the BTP market again.

They said 2015 lows of 88 basis points between German and Italian yields “don’t seem out of reach”.

Bond yields also declined in Spain and Portugal.

News of a decline in German industrial orders in December put a brief pressure on German yields.

But Bund yields soon headed higher, with the benchmark 10-year note touching the highest since early September at -0.413% and putting it on track for its biggest weekly jump since August.

Reporting by Sara Rossi and Tommy Wilkes Additional reporting by Dhara Ranasinghe Editing by Kirsten Donovan

.



image source

UPDATED The 2-Draghi Effect pushed the Italy-Germany gap to its lowest level in 5 years | Instant News


* Italian 10-year yields fell 10 bps this week

* German yields rise despite poor industry data

* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Added details, latest prices)

MILAN / LONDON, Feb 5 (Reuters) – Italian 10-year government bond yields headed for their biggest weekly decline since July on Friday, while the spread on German yields narrowed to the smallest level in five years as former head of the European Central Bank Mario Draghi starts talks to form a new government.

Trading on eurozone debt markets was generally weak at the end of the week. It was slightly moved by data showing US job growth rebounded moderately in January, in line with forecasts and which economists said supported the case for more government aid money.

Global stocks approach record highs as progress in vaccine distribution and hopes of US stimulus pushes bets on further normalization in the global economy.

That backdrop boosted sentiment towards riskier assets such as European peripheral bonds, with Italy set to end the week at its highest following this week’s political developments.

Draghi, given the mandate to form a new Italian government, will end a round of consultations on Saturday. It remains unclear whether he can win support from the anti-establishment 5 Star Movement, the largest party in parliament.

Italian 10-year BTP, or government bonds, fell as far as 0.51%, the lowest level since January 11, before rebounding to 0.54%. It’s down more than 10 bps this week.

Italy / Germany’s 10-year yield difference narrowed to around 94 basis points, since at least the start of 2016.

“We have seen how the market is not only like Draghi, but also likes Draghi and foreign investors are supporting the rally in BTP,” said MFS fixed income research analyst Annalisa Piazza.

Piazza said room for further tightening was limited, although Italy could see further performance over its eurozone counterparts if Draghi’s government succeeds in executing its program in the medium term.

“The market is expecting a government led by Draghi. But even if the former ECB chief is unable to form a government, we will see a sell-off in the short term which will translate into interest rate compression in the long term, “said Althea Spinozzi, fixed income strategist at Saxo Bank.

The UniCredit analyst added that the spread of further compression in Italy will likely depend on the extent of parliamentary support for the government and the willingness of foreign investors to increase their exposure to the BTP market again.

They said 2015 lows of 88 basis points between German and Italian yields “don’t seem out of reach”.

Bond yields also declined in Spain and Portugal.

News of a decline in German industrial orders in December put a brief pressure on German yields.

But Bund yields soon headed higher, with the benchmark 10-year note touching the highest since early September at -0.413% and putting it on track for its biggest weekly jump since August.

Reporting by Sara Rossi and Tommy Wilkes Additional reporting by Dhara Ranasinghe Editing by Kirsten Donovan

.



image source

UPDATE 2-Italian results fell as PM Conte wants to form a new government | Instant News


* Conte will step down in an attempt to form a new government

* German 10-year yield fell to -0.561% in early trading

* US Treasury yields hit a three-week low

* Barriers to US stimulus plans worry stock markets (.)

LONDON, Jan 26 (Reuters) – Italian government bond yields fell across a curve on Tuesday as the prime minister will try to form a new government, fueling hopes of a return to political stability in the Southern European country.

Italian Prime Minister Giuseppe Conte will hand over his resignation to the head of state on Tuesday, Conte’s office said, in the hope that President Sergio Mattarella will give him the mandate to form a new government.

“If Conte manages to form a new government within a week with a stable majority, then the potential for tightening the spread is significant,” said ING interest rate strategist Antoine Bouvet. “But at the moment it is still a political gamble,” he added.

Italian government bond yields fell 2-4 basis points across the curve, with the benchmark 10-year yield dropping 3.5 bps to 0.646%.

The difference in the closely watched Italian-German bond yields was five basis points today at 114.5 bps.

While the resignations allowed elections to be avoided in Italy, a combination of political concerns and stock market jitters over US fiscal stimulus increased demand for safe havens such as the German Bunds.

Asian stocks fell on Tuesday, retreating from record highs as lingering concerns about a potential impediment to the Biden government’s $ 1.9 trillion stimulus weighed on sentiment.

The yield on German 10-year government bonds fell to a two-week low at the start of trading on Tuesday, although they again rose slightly to -0.54% at 1100 GMT, up one basis point on the day.

German Bund demand also came as the yield on the 10-year US Treasury fell to a three-week low of 1.028% earlier in the session as the US Senate pushed to pass the COVID-19 bill.

Later in this session, the EU is likely to finalize the sale of its benchmark seven-year bond and knock on outstanding 2050 debt through syndication. (Reporting by Abhinav Ramnarayan, editing by Karin Strohecker and Angus MacSwan)

.



image source

UPDATE Italian 10-year 2-Italian government bond yields fell from a record low | Instant News


(Adding US jobs data, US presidential election, updating prices)

LONDON, 6 Nov (Reuters) – Yields on Italian 10-year government bonds fell to a record low on Friday morning but gradually increased in the afternoon along with eurozone government bonds and US treasury after stronger than expected jobs data in the US.

Italy’s five-year yields also left negative territory in the afternoon, after falling below zero percent for the first time on Thursday.

While the US economy created the fewest jobs in five months in October, nonfarm payrolls increased by 638,000 jobs last month, better than the 600,000 forecast by economists surveyed by Reuters.

The yield on the 10 year German government bond increased 3 basis points to -0.613%.

Yields continued to rise throughout the afternoon as Democratic presidential candidate Joe Biden took the lead over President Donald Trump in the states of Pennsylvania and Georgia, putting him on the brink of winning the White House.

Yield on Italian 10-year BTP fell to a record low of 0.603% around midday but gradually rose back to 0.632% in afternoon trade.

Lyn Graham-Taylor, interest rate strategist at Rabobank, said the overall risk-on mood was supportive of Italian yields, but added that the Bank of Italy’s buyback of five-year government bonds could also be the reason Italian yields fell more than peers. they. .

Italy has bought back five bonds with maturities ranging from 2021 to 2023 for a total of 4 billion euros ($ 4.75 billion), the Ministry of Finance said on Friday.

The yield on the five year Italian government bond returned to positive territory after falling to -0.008% in the morning.

The yield was unaffected by the -0.8% drop in Italian retail sales in September from the previous month.

Italy will continue to issue bonds dedicated to retail investors next year and beyond, Finance Ministry debt chief Davide Iacovoni said on Friday.

“The new political landscape may prove supportive of risk assets,” ING analysts said in a note to clients.

“As the US election vote has been moving very fast over the last two days, we are observing a shift in the dominating narrative in financial markets. The risk assets have used that time to come to terms with Biden’s ‘lame duck’ presidency, and some have even hailed it as a sweet spot, ”said ING analysts.

With Biden leading in the results but looking now unlikely to win over the Senate, there’s been a big abandonment of bets on the Democratic sweepers in both Boards.

As a result, investors weighed prospects for major stimulus measures while cheering faded expectations of higher taxes and new regulations.

Reporting by Olga Cotaga; Edited by Kevin Liffey and Louise Heavens

.



image source