Euro zone yields drop, markets cautious before economic data
By Stefano Rebaudo
Aug 19 (Reuters) -Euro zone government bond yields fell on Monday as investors braced for a week packed with economic data and a meeting of central bankers at Jackson Hole.
Investors will be looking at euro zone business activity figures and negotiated wage growth data due later in the week, which the European Central Bank will consider before its September rate decision.
Germany's 10-year government bond yield DE10YT=RR, the benchmark for the euro zone bloc, was down 3 basis points (bps) at 2.23%.
Some analysts say that markets will face a reality check late this week, after recent volatility, as investors and central bankers return from holidays.
Euro area borrowing costs have tracked perceptions of risks in the U.S. economy, with U.S. Treasury yields easing in London trade on Monday, partly reversing Thursday's big gains as investors digested data showing a resilient U.S. consumer and inflation trending lower.
"The next few weeks will likely determine whether the Federal Reserve ends up cutting by 50-75 bps this year or by 150 bps or more," said Ralf Pressuer, rate strategist at BofA. He said the Jackson Hole conference was the first opportunity for the Fed to push back against the implied chance of a 50 bps cut at one of the remaining three meetings of the year.
"Pricing in less than 75 bps for the remainder of 2024 needs confirmation that the July labour market report was indeed weather distorted, as well as continued strength in ISM services," he added.
Further weakness in economic data could lead to traders pricing in successive 50-bp cuts.
Markets are discounting 95 bps of cuts by year-end. FEDWATCH
A decline in euro zone count5ries' August flash PMIs, due on Thursday, "would cast further doubt over prospects for the euro area's growth rebound, and would potentially set the stage for downward revisions to the ECB's growth forecast profile", Barclays said in a note.
Meanwhile, an upside surprise in the second quarter euro area negotiated wages indicator could lead to fresh nervousness around inflationary second-round effects.
Money markets priced in around 65 bps of ECB rate cuts in 2024 EURESTECBM3X4=ICAP, implying two 25 bps moves and an around 60% chance of a third cut.
Investors will scrutinize comments by ECB speakers on the growth outlook amid rising risks to activity, especially in Germany.
The spread between U.S. and German borrowing costs DE10US10=RR was unchanged at 163 bps. It hit a 12-month low at around 153 bps early this month.
Italy's 10-year yields IT10YT=RR dropped 4.5 bps to 3.60%, with the yield gap between Italian and German bonds roughly unchanged at 137 bps DE10IT10=RR.
Reporting by Stefano Rebaudo, editing by Emelia Sithole-Matarise
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
