Fleursdumal
फूल की बुराई
oggi c'erano aste in Italia e Grecia
Euro debt-Yields higher, Noyer comments, supply weigh
By Dhara Ranasinghe
LONDON, Feb 15 (Reuters) - Euro zone government bond yields rose on Tuesday, pushed higher after a European Central Bank policymaker called for tighter global monetary policy and the market digested new bond supply from Italy and Greece.
ECB governing council member and Bank of France governor Christian Noyer said in an interview with the International Herald Tribune that loose monetary policy worldwide would have to change to avoid inflationary build-up.
This helped push 10-year bond yields to their highest level in almost 1-1/2 weeks. News of a stronger-than-expected rise in U.S. retail sales kept the market on the back foot in afternoon trade. Retail sales fell 0.3 percent in January but excluding the volatile auto sector, sales rose 0.6 percent.
"Some of the more hawkish central ECB rhetoric that we have seen in the last couple of days is maybe putting a bit of pressure on the front end of the curve," said ABN AMRO fixed income strategist Jason Simpson.
"The big focus is (U.S. Federal Reserve Chairman Alan) Greenspan tomorrow. This is going to set the tone for the market for at least for the next couple of weeks. So Europe is probably just going to trade in the US's shadow for a while now."
At 1640 GMT, the two-year Schatz yield <EU2YT=RR> was up 2.8 basis points (bps) at 2.41 percent. The 10-year Bund yield was up 2.5 bps at 3.51 percent. It rose as far as 3.516 percent, pulling further away from Thursday's record low at 3.42 percent.
Euribor interest rate futures also fell on the Noyer comments, which follow hawkish remarks from other ECB officials this week. The June Euribor future <FEIM5> was down 1 bps at 97.770, having hit a 1-week low at 97.760.
Fed chief Alan Greenspan's Congressional testimony is on Wednesday and Thursday and is the week's key market focus.
ITALY AUCTIONS WELL RECEIVED
Italy sold 3.25 billion euros of 3 percent 5-year government bonds and 2 billion euros of 4.5 percent February 2020 BTPs.
The 5-year paper drew bids for 1.57 times the amount on offer, while the 15-year bond was covered 1.93 times.
"Demand for 15-year debt was especially healthy...People remain interested in the long end -- but we are talking about 15-year bonds, which are different to the 30-year. The 15-year has richened up less than the 30-year," said Luca Cazzulani, fixed income strategist at UBM in Milan.
Greece drew strong demand for a 5.0 billion euro 10-year bond as the long maturity appealed to yield-hungry investors willing to overlook the budget pressures the country faces.
The bond was sold at a spread of 19 basis points over German Bunds, as had been expected. Euro zone government bond supply this week is estimated at around 21 billion euros.
Earlier, the German ZEW economic sentiment index in February came in stronger-than-expected at 35.9 compared with a forecast 30.0, keeping bond prices in check.
The March Bund future <FGBLH5> was down 25 ticks at 120.23.
Bunds underperformed Treasuries, with the 10-year yield gap 2 bps narrower at 62 bps. The euro swap spread was steady at 8 basis points.
Euro debt-Yields higher, Noyer comments, supply weigh
By Dhara Ranasinghe
LONDON, Feb 15 (Reuters) - Euro zone government bond yields rose on Tuesday, pushed higher after a European Central Bank policymaker called for tighter global monetary policy and the market digested new bond supply from Italy and Greece.
ECB governing council member and Bank of France governor Christian Noyer said in an interview with the International Herald Tribune that loose monetary policy worldwide would have to change to avoid inflationary build-up.
This helped push 10-year bond yields to their highest level in almost 1-1/2 weeks. News of a stronger-than-expected rise in U.S. retail sales kept the market on the back foot in afternoon trade. Retail sales fell 0.3 percent in January but excluding the volatile auto sector, sales rose 0.6 percent.
"Some of the more hawkish central ECB rhetoric that we have seen in the last couple of days is maybe putting a bit of pressure on the front end of the curve," said ABN AMRO fixed income strategist Jason Simpson.
"The big focus is (U.S. Federal Reserve Chairman Alan) Greenspan tomorrow. This is going to set the tone for the market for at least for the next couple of weeks. So Europe is probably just going to trade in the US's shadow for a while now."
At 1640 GMT, the two-year Schatz yield <EU2YT=RR> was up 2.8 basis points (bps) at 2.41 percent. The 10-year Bund yield was up 2.5 bps at 3.51 percent. It rose as far as 3.516 percent, pulling further away from Thursday's record low at 3.42 percent.
Euribor interest rate futures also fell on the Noyer comments, which follow hawkish remarks from other ECB officials this week. The June Euribor future <FEIM5> was down 1 bps at 97.770, having hit a 1-week low at 97.760.
Fed chief Alan Greenspan's Congressional testimony is on Wednesday and Thursday and is the week's key market focus.
ITALY AUCTIONS WELL RECEIVED
Italy sold 3.25 billion euros of 3 percent 5-year government bonds and 2 billion euros of 4.5 percent February 2020 BTPs.
The 5-year paper drew bids for 1.57 times the amount on offer, while the 15-year bond was covered 1.93 times.
"Demand for 15-year debt was especially healthy...People remain interested in the long end -- but we are talking about 15-year bonds, which are different to the 30-year. The 15-year has richened up less than the 30-year," said Luca Cazzulani, fixed income strategist at UBM in Milan.
Greece drew strong demand for a 5.0 billion euro 10-year bond as the long maturity appealed to yield-hungry investors willing to overlook the budget pressures the country faces.
The bond was sold at a spread of 19 basis points over German Bunds, as had been expected. Euro zone government bond supply this week is estimated at around 21 billion euros.
Earlier, the German ZEW economic sentiment index in February came in stronger-than-expected at 35.9 compared with a forecast 30.0, keeping bond prices in check.
The March Bund future <FGBLH5> was down 25 ticks at 120.23.
Bunds underperformed Treasuries, with the 10-year yield gap 2 bps narrower at 62 bps. The euro swap spread was steady at 8 basis points.
- boh
