Connect with us

Popular World News

Euro zone investors look for clues as Fed minutes show no clear path for interest rates By Reuters

Euro zone investors look for clues as Fed minutes show no clear path for interest rates By Reuters

ECONOMIC NEWS

Euro zone investors look for clues as Fed minutes show no clear path for interest rates By Reuters



By Virginia Furness

LONDON (Reuters) – Euro zone government bond yields edged lower on Thursday after minutes from the Federal Reserve showed policymakers were deeply divided over the path of interest rates, and ahead of euro zone PMI data later in the session.

The Fed, which sets the tone for monetary policy globally, cut rates by 25 basis points at its last meeting, but was anything but unanimous on how to respond to slowing growth in the U.S. economy, with most policymakers favoring keeping rates unchanged.

They were however united in wanting to signal they were not on a preset path to more cuts, a message not likely to sit well with U.S. President Donald Trump.

The minutes offered “nothing to suggest that policymakers felt the need to use the FOMC minutes to send a more dovish signal despite an escalation of the trade war and deeper inversion of the yield curve since the July meeting,” wrote analysts at NatWest Markets in a note published on Thursday.

Global central bankers meet at Jackson Hole, Wyoming, for their annual gathering on Friday, and markets will be eagerly awaiting any signals from there.

German bund yields tracked U.S. Treasuries and were two basis points lower in early trade.

Germany’s 10-year bond yield was at -0.692%, while 10-year Treasuries were down by the same amount at 1.56% (), ().

Germany’s 30-year bond yield was also well bid, and was last down three basis points at -0.20%. A lackluster auction on Wednesday saw 30-year debt sold at a record low yield of -0.11%, but it raised only 824 million euros of bonds maturing in 2050 versus a target of 2 billion euros.

Flash PMI data for France, Germany and the euro zone will be watched for any further indication as to the state of the European economy. But money markets are still fully pricing in a 10 basis point rate cut by the European Central Bank , keeping downward pressure on bond yields.

Meanwhile Italian 10-year bond yields hit new October 2016 lows and were last down 4 bps to 1.297% (), while its spread over Italy fell below 200 bps ().

Italy may be closer to reaching a deal on a new government, after Prime Minister Giuseppe Conte resigned on Tuesday.

(The story corrects first paragraph to ahead of euro zone PMI (not inflation) data.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

More in ECONOMIC NEWS

To Top
error: Content is protected !!
Top