May 26, 2022

Hardwood Paroxysm

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European government bond yields are rising. Ten-year BTPs at 3.1%, highest since 2018: Spread widens to over 200 pips

Fear that inflation will remain high and be accompanied by inflation Recessiontogether withescalation The conflict in Ukraine and the goal weakness From the country of her relationship Debt/GDP Exceeded 150%, working to increase”Europe dangers“From a markets perspective. On Friday, interest rates paid by government bonds of all major EU countries rose sharply.

performance Ten years BTPs On May 6 it rose to 3.1%at its highest level since November 2018. The difference (diffuse) compared to the rates he pays German Bund At the age of ten he touched me 202 basis points Then it folds back and closes above 200, thanks to the fact that even the German ten years have gone up1.1%, Record value since 2014. Did not help industrial production collapse Which in Germany shrank in March, according to data from the Federal Statistical Office (Destatis), by 3.9% compared to February. The institute notes that this is the most pronounced decrease since the Covid crisis in April 2020 when the decline was -18.1% compared to March 2020.

In the face of fears that are clearly spreading in the market Frank EldersonD., a member of the European Central Bank’s Governing Council, said during a question and answer session on Twitter that Eurotower should “make sure that monetary policy It moves uniformly across the eurozone and is ‘ready’ to use aWide range of tools for retail processingincluding potential flexibility in reinvestment baby‘, that is, the government bond-buying program that was halted in March. By ‘retail’ we mean an excessive gap between the margins: so the central bank is considering what interventions to implement in the event of drifts that would concern primarily the most indebted countries in southern Europe.

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Wall Street sank on Thursday as fear of anyone resurfaced Inflation accompanied by economic stagnation. The rise began on Wednesday, with a decision from feed it It has proven to be short-lived with investors absorbing the ad high rateYou fear that the US central bank will face difficulties on its own fight inflation In the economic slowdown scenario, where the risks Recession It becomes more urgent.