HomeFinancial MarketsEurozone Bonds Hold Steady Amid Uncertain Economic Landscape

Eurozone Bonds Hold Steady Amid Uncertain Economic Landscape

Eurozone yields were relatively unchanged at the start of August, remaining unphased by recent signs of stress in Europe’s manufacturing sector. The 10-year German Bund, the European benchmark, held steady at 2.46%. Italy’s 10-year yield, another benchmark, remained flat at 4.11%.

This comes after marginally cooler eurozone inflation data was released on Monday, along with optimistic eurozone economic growth figures. “Markets are showing signs of summer liquidity as investors take a much-deserved break,” Mohit Kumar, chief financial economist of Europe at Jefferies observed.

Following a sharp rise in European interest rates over the past 12 months, European Central Bank (ECB) President Christine Lagarde indicated a possibility that the central bank may pause its rate hikes in September, thereby providing some relief to European bonds.

Manufacturing activity in July contracted at its fastest pace since the COVID pandemic, as was expected by analysts. This data, in contrast with positive inflation and economic growth data, has created a cloudy economic outlook for the eurozone.

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