(Finance) – The first session of the week, characterized by a climate of risk aversion which affects the main asset classes, still sees rising yields for eurozone government bondswith the ten-year Bund trading at the highest levels since 2011 and the BTP of the same maturity reaching the highest values since last March.
According to analysts at Intesa Sanpaoloon the markets some uncertainties seem to weigh heavily. On the one hand, the increases in prices of some energy raw materials, such as oil and natural gas, could modify, if persistent, the inflation prospects and therefore the prospects of market returns; on the other hand, some speculation persists regarding possible choices in a restrictive sense of the management of the ECB’s balance sheet which weigh on the long term and on peripheral issues.
During the day, several statements also arrived from important central bankers in the euro area. “We believe our policy rates have reached levels that, maintained for a sufficiently long periodwill contribute substantially to the timely return of inflation to our target”, said the President of the ECB, Christine Lagardeat a hearing in the Committee on Economic and Monetary Affairs of the European Parliament.
However, Lagarde highlighted a modest slowdown in an otherwise resilient labor market, which will contribute to disinflation after rapid nominal wage growth maintained pressure on prices. “The labor market is finally adapting and it will probably take some more time to do so,” he said. “Job creation in the service sector is moderating and overall momentum is slowing“.
Almost simultaneously, Isabel Schnabel, a member of the ECB board, said it was too early to say that the euro zone’s fight against high inflation is over, despite a decline in liquidity circulating in the bloc. In the morning, the councilor Villeroy de Galhau stressed that Frankfurt’s attention will now turn to keeping rates at this level for a sufficiently long period.
The yield on the German 10-year bond reached quota 2.79% (+6 percentage points), while the Italian one settled at 4.65% (+8 pp). The French 10-year bond reached 3.34% (+6 pp), the Spanish one 3.86% (+6 pp) and the Greek one 4.20% (+5 pp).